Frank Weston, supervisor of the Freemont Corporation's Machining Department, was visibly upset after being reprimanded for his department's poor performance over the prior month. The department's cost control report is given below: Freemont Corporation-Machining Department Cost Control Report For the Month Ended June 30 Planning Budget Machine-hours Direct labor wages Supplies Maintenance Utilities Supervision. Depreciation Total Actual Results 42,000 $ 80,500 40,000 $ 78,400 22,800 Variances $ 2,100 U 2,000 U 2,700 U 1,600 U 24,800 24,000 21,700 48,000 81,000 $ 280,000 $ 271,600 $ 8,400 U 21,300 20,100 48,000 81,000 "I just can't understand all of these unfavorable variances," Weston complained to the supervisor of another department. "When the boss called me in, I thought he was going to give me a pat on the back because I know for a fact that my department worked more efficiently last month than it has ever worked before. Instead, he tore me apart. I thought for a minute that it might be over the supplies that were stolen out of our warehouse last month. But they only amounted to a couple of hundred dollars, and just look at this report. Everything is unfavorable." Direct labor wages and supplies are variable costs; supervision and depreciation are fixed costs; and maintenance and utilities are mixed costs. The fixed component of the budgeted maintenance cost is $14,900; the fixed component of the budgeted utilities cost is $13,500. Required: 2. Complete the performance report that will help Mr. Weston's superiors assess how well costs were controlled in the machining department. (Do not round your intermediate calculations. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.)
Frank Weston, supervisor of the Freemont Corporation's Machining Department, was visibly upset after being reprimanded for his department's poor performance over the prior month. The department's cost control report is given below: Freemont Corporation-Machining Department Cost Control Report For the Month Ended June 30 Planning Budget Machine-hours Direct labor wages Supplies Maintenance Utilities Supervision. Depreciation Total Actual Results 42,000 $ 80,500 40,000 $ 78,400 22,800 Variances $ 2,100 U 2,000 U 2,700 U 1,600 U 24,800 24,000 21,700 48,000 81,000 $ 280,000 $ 271,600 $ 8,400 U 21,300 20,100 48,000 81,000 "I just can't understand all of these unfavorable variances," Weston complained to the supervisor of another department. "When the boss called me in, I thought he was going to give me a pat on the back because I know for a fact that my department worked more efficiently last month than it has ever worked before. Instead, he tore me apart. I thought for a minute that it might be over the supplies that were stolen out of our warehouse last month. But they only amounted to a couple of hundred dollars, and just look at this report. Everything is unfavorable." Direct labor wages and supplies are variable costs; supervision and depreciation are fixed costs; and maintenance and utilities are mixed costs. The fixed component of the budgeted maintenance cost is $14,900; the fixed component of the budgeted utilities cost is $13,500. Required: 2. Complete the performance report that will help Mr. Weston's superiors assess how well costs were controlled in the machining department. (Do not round your intermediate calculations. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.)
Chapter1: Financial Statements And Business Decisions
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Transcribed Image Text:Machine-hours
Direct labor wages
Supplies
Maintenance
Utilities
Supervision
Depreciation
Total
Freemont Corporation-Machining Department
Flexible Budget Performance Report
For the Month Ended June 30
Actual
Results
42,000
80,500
24,800
24,000
21,700
48,000
81,000
$ 280,000
$
Revenue and Spending
Variances
F
U
U
U
0 None
0 None
U
Flexible
Budget
$
0
Activity Variances
U
U
U
U
0 None
0 None
Planning
Budget
40,000
$ 78,400
22,800
21,300
20,100
48,000
81,000
$ 271,600
Transcribed Image Text:Frank Weston, supervisor of the Freemont Corporation's Machining Department, was visibly upset after being reprimanded for his
department's poor performance over the prior month. The department's cost control report is given below:
Freemont Corporation-Machining Department
Cost Control Report
For the Month Ended June 30-
Machine-hours
Direct labor wages
Supplies
Maintenance
Utilities
Supervision
Depreciation
Total
Actual
Results
42,000
$ 80,500
Planning
Budget
40,000
$ 78,400
22,800
24,800
24,000
21,300
21,700
20,100
48,000
48,000
81,000
81,000
$ 280,000 $ 271,600
Variances
$ 2,100 U
2,000 U
2,700 U
1,600 U
0
0
$ 8,400 U
"I just can't understand all of these unfavorable variances, Weston complained to the supervisor of another department. "When the
boss called me in, I thought he was going to give me a pat on the back because I know for a fact that my department worked more
efficiently last month than it has ever worked before. Instead, he tore me apart. I thought for a minute that it might be over the supplies
that were stolen out of our warehouse last month. But they only amounted to a couple of hundred dollars, and just look at this report.
Everything is unfavorable."
Direct labor wages and supplies are variable costs; supervision and depreciation are fixed costs; and maintenance and utilities are
mixed costs. The fixed component of the budgeted maintenance cost is $14,900; the fixed component of the budgeted utilities cost is
$13,500.
Required:
2. Complete the performance report that will help Mr. Weston's superiors assess how well costs were controlled in the machining
department. (Do not round your intermediate calculations. Indicate the effect of each variance by selecting "F" for favorable, "U"
for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.)
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