Problem 22-1A Responsibility accounting performance reports; controllable and budgeted costs LO P1 Billie Whitehorse, the plant manager of Travel Free’s Indiana plant, is responsible for all of that plant’s costs other than her own salary. The plant has two operating departments and one service department. The camper and trailer operating departments manufacture different products and have their own managers. The office department, which Whitehorse also manages, provides services equally to the two operating departments. A budget is prepared for each operating department and the office department. The company’s responsibility accounting system must assemble information to present budgeted and actual costs in performance reports for each operating department manager and the plant manager. Each performance report includes only those costs that a particular operating department manager can control: raw materials, wages, supplies used, and equipment depreciation. The plant manager is responsible for the department managers’ salaries, utilities, building rent, office salaries other than her own, and other office costs plus all costs controlled by the two operating department managers. The annual departmental budgets and actual costs for the two operating departments follow.     Budget   Actual   Campers Trailers Combined Campers Trailers Combined Raw materials $ 195,000   $ 275,000   $ 470,000   $ 194,200   $ 273,200   $ 467,400   Employee wages   104,000     205,000     309,000     106,600     206,400     313,000   Dept. manager salary   43,000     52,000     95,000     44,000     53,500     97,500   Supplies used   33,000     90,000     123,000     31,700     91,600     123,300   Depreciation—Equip.   60,000     125,000     185,000     60,000     125,000     185,000   Utilities   3,600     5,400     9,000     3,300     5,000     8,300   Building rent   5,700     9,300     15,000     5,300     8,700     14,000   Office department costs   68,750     68,750     137,500     67,550     67,550     135,100   Totals $ 513,050   $ 830,450   $ 1,343,500   $ 512,650   $ 830,950   $ 1,343,600       The office department’s annual budget and its actual costs follow.     Budget Actual Plant manager salary $ 80,000   $ 82,000   Other office salaries   32,500     30,100   Other office costs   25,000     23,000   Totals $ 137,500   $ 135,100       Required: 1. Prepare responsibility accounting performance reports that list costs controlled by the following. a. Manager of the Camper department. b. Manager of the Trailer department. c. Manager of the Indiana plant.

help please answer in text form with proper workings and explanation for each and every part and steps with concept and introduction no AI no copy paste remember answer must be in proper format with all working

Chapter 2 (Continued):  Basic Cost Management Concepts College offers students a number of different majors and disciplines.  These majors and disciplines have department chairpersons who are responsible for the department budget preparation.  Please define direct costs and indirect costs and then prepare a list of three direct and three indirect costs for the Accounting Department at  College. Hint:  See Exercise 10 in Chapter 2 of your eText.

For each of the following situations, two scenarios are described, labeled A and B. Choose which scenario is descriptive of a setting corresponding to activity-based responsibility accounting and which is descriptive of financial-based responsibility accounting. Provide a brief commentary on the differences between the two systems for each situation, addressing the possible advantages of the activity-based view over the financial-based view. Situation 1 A: The purchasing manager, receiving manager, and accounts payable manager are given joint responsibility for procurement. The charges given to the group of managers are to reduce costs of acquiring materials, decrease the time required to obtain materials from outside suppliers, and reduce the number of purchasing mistakes (e.g., wrong type of materials or the wrong quantities ordered). B: The plant manager commended the manager of the Grinding Department for increasing his departments machine utilization ratesand doing so without exceeding the departments budget. The plant manager then asked other department managers to make an effort to obtain similar efficiency improvements. Situation 2 A: Delivery mistakes had been reduced by 70 percent, saving over 40,000 per year. Furthermore, delivery time to customers had been cut by two days. According to company policy, the team responsible for the savings was given a bonus equal to 25 percent of the savings attributable to improving delivery quality. Company policy also provided a salary increase of 1 percent for every day saved in delivery time. B: Bill Johnson, manager of the Product Development Department, was pleased with his departments performance on the last quarters projects. They had managed to complete all projects under budget, virtually assuring Bill of a fat bonus, just in time to help with this years Christmas purchases. Situation 3 A: Harvey, dont worry about the fact that your department is producing at only 70 percent capacity. Increasing your output would simply pile up inventory in front of the next production department. That would be costly for the organization as a whole. Sometimes, one department must reduce its performance so that the performance of the entire organization can improve. B: Susan, I am concerned about the fact that your departments performance measures have really dropped over the past quarter. Labor usage variances are unfavorable, and I also see that your machine utilization rates are down. Now, I know you are not a bottleneck department, but I get a lot of flack when my managers efficiency ratings drop. Situation 4 A: Colby was muttering to himself. He had just received last quarters budgetary performance report. Once again, he had managed to spend more than budgeted for both materials and labor. The real question now was how to improve his performance for the next quarter. B: Great! Cycle time had been reduced and, at the same time, the number of defective products had been cut by 35 percent. Cutting the number of defects reduced production costs by more than planned. Trends were favorable for all three performance measures. Situation 5 A: Cambry was furious. An across-the-board budget cut! How can they expect me to provide the computer services required on less money? Management is convinced that costs are out of control, but I would like to know whereat least in my department! B: After a careful study of the Accounts Payable Department, it was discovered that 80 percent of an accounts payable clerks time was spent resolving discrepancies between the purchase order, receiving document, and the suppliers invoice. Other activities such as recording and preparing checks consumed only 20 percent of a clerks time. A redesign of the procurement process eliminated virtually all discrepancies and produced significant cost savings. Situation 6 A: Five years ago, the management of Breeann Products commissioned an outside engineering consulting firm to conduct a time-and-motion study so that labor efficiency standards could be developed and used in production. These labor efficiency standards are still in use today and are viewed by management as an important indicator of productive efficiency. B: Janet was quite satisfied with this quarters labor performance. When compared with the same quarter of last year, labor productivity had increased by 23 percent. Most of the increase was due to a new assembly approach suggested by production line workers. She was also pleased to see that materials productivity had increased. The increase in materials productivity was attributed to reducing scrap because of improved quality. Situation 7 A: The system converts materials into products, not people at work stations. Therefore, process efficiency is more important than labor efficiencybut we also must pay particular attention to those who use the products we produce, whether inside or outside the firm. B: I was quite happy to see a revenue increase of 15 percent over last year, especially when the budget called for a 10 percent increase. However, after reading the recent copy of our trade journal, I now wonder whether we are doing so well. I found out that the market expanded by 30 percent, and our leading competitor increased its sales by 40 percent.