Durham Company uses a responsibility reporting system. It has divisions in Denver, Seattle, and San Diego. Each division has three production departments: Cutting, Shaping, and Finishing. The responsibility for each department rests with a manager who reports to the division production manager. Each division manager reports to the vice president of production. There are also vice presidents for marketing and finance. All vice presidents report to the president.
In January 2017, controllable actual and budget manufacturing overhead cost data for the departments and divisions were as shown below.

Additional overhead costs were incurred as follows: Seattle division production manager-actual costs $52,500, budget $51,000; vice president of production-actual costs $65,000, budget $64,000; president-actual costs $76,400, budget $74,200. These expenses are not allocated.
The vice presidents who report to the president, other than the vice president of production, had the following expenses.
Vice President ............Actual.............. Budget
Marketing...............$133,600............$130,000
Finance ...................109,000..............104,000
Instructions
(a)Using the format, prepare the following responsibility reports.
(1)Manufacturing overhead-Cutting Department manager-Seattle division.
(2)Manufacturing overhead-Seattle division manager.
(3)Manufacturing overhead-vice president of production.
(4)Manufacturing overhead and expenses-president.
(b) Comment on the comparative performances of:
(1)Department managers in the Seattle division.
(2)Division managers.
(3)Vice presidents.
(a) (1)$12,500 U
(2)$29,000 U
(3)$42,000 U
(4)$52,800 U
Compare ROI and residual income.

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Manufac Overhead Actual Budget Individual costs-Cutting Department-Seattle Indirect labor Indirect materials Maintenance Utilities Supervision 73,000 $ 70,000 47.900 46,000 20,500 18,o0o 20,10017,00o 22.000 20,000 $183500$171,000 Total costs Shaping Department-Seattle Finishing Department-Seattle Denver division San Diego division $158,000 $148.000 210,00O 205,000 678,000 673,000 722,000715,00o