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 2020, 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.

Instructions

Using the format in Illustration 25.19, prepare the following responsibility reports.

a. Manufacturing overhead—Cutting Department manager—Seattle division.

b. Manufacturing overhead—Seattle division manager.

c. Manufacturing overhead—vice president of production.

d. Manufacturing overhead and expenses—president.

Transcribed Image Text:

Manufacturing Overhead Actual Budget Individual costs-Cutting Department-Seattle $ 73,000 $ 70,000 46,000 Indirect labor Indirect materials 47,900 Maintenance 20,500 18,000 17,000 20,000 Utilities 20,100 Supervision 22,000 $183,500 $171,000 Total costs $158,000 $148,000 Shaping Department-Seattle Finishing Department-Seattle 210,000 205,000 673,000 715,000 Denver division 678,000 San Diego division 722,000