One subunit of Speed Sports Manufacturing Company had the following financial results last month: A B C D E 1 Speed Sports Manufacturing Company—Camping and Hiking Subunit 2 Monthly Performance Report 3 For the Month 4 Actual Budgeted Variance * Variance Percentage * 5 Direct materials $16,140 $15,000 6 Direct labor 19,020 20,000 7 Indirect labor 29,300 25,000 8 Utilities 13,110 12,000 9 Depreciation 19,000 19,000 10 Repairs and maintenance 3,370 4,000 11 Total $99,940 $95,000 *Be sure to indicate whether each variance is favorable (F) or unfavorable (U). Requirements: 1. Complete the performance evaluation report for this subunit. 2. Based on the data presented, what type of responsibility center is the subunit? 3. Which items should be investigated if part of the management's decision criteria is to investigate all variances exceeding $3,400 or 12%? 4. Should only unfavorable variances be investigated? Explain.
One subunit of Speed Sports Manufacturing Company had the following financial results last month: A B C D E 1 Speed Sports Manufacturing Company—Camping and Hiking Subunit 2 Monthly Performance Report 3 For the Month 4 Actual Budgeted Variance * Variance Percentage * 5 Direct materials $16,140 $15,000 6 Direct labor 19,020 20,000 7 Indirect labor 29,300 25,000 8 Utilities 13,110 12,000 9 Depreciation 19,000 19,000 10 Repairs and maintenance 3,370 4,000 11 Total $99,940 $95,000 *Be sure to indicate whether each variance is favorable (F) or unfavorable (U). Requirements: 1. Complete the performance evaluation report for this subunit. 2. Based on the data presented, what type of responsibility center is the subunit? 3. Which items should be investigated if part of the management's decision criteria is to investigate all variances exceeding $3,400 or 12%? 4. Should only unfavorable variances be investigated? Explain.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
One subunit of Speed Sports Manufacturing Company had the following financial results last month:
|
A
|
B
|
C
|
D
|
E
|
|
|
1
|
Speed Sports Manufacturing Company—Camping and Hiking Subunit
|
||||
|
2
|
Monthly Performance Report
|
||||
|
3
|
For the Month
|
||||
|
4
|
|
Actual
|
Budgeted
|
Variance *
|
Variance Percentage *
|
|---|---|---|---|---|---|
|
5
|
Direct materials
|
$16,140
|
$15,000
|
|
|
|
6
|
Direct labor
|
19,020
|
20,000
|
|
|
|
7
|
Indirect labor
|
29,300
|
25,000
|
|
|
|
8
|
Utilities
|
13,110
|
12,000
|
|
|
|
9
|
Depreciation
|
19,000
|
19,000
|
|
|
|
10
|
Repairs and maintenance
|
3,370
|
4,000
|
|
|
|
11
|
Total
|
$99,940
|
$95,000
|
|
|
*Be sure to indicate whether each variance is favorable (F) or unfavorable (U).
Requirements:
|
1.
|
Complete the performance evaluation report for this subunit.
|
|
2.
|
Based on the data presented, what type of responsibility center is the subunit?
|
|
3.
|
Which items should be investigated if part of the management's decision criteria is to investigate all variances exceeding $3,400 or 12%? |
|
4.
|
Should only unfavorable variances be investigated? Explain.
|
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education