Adapt Budget Control Concepts to Research Organization: Argo Company has a well-organized research program. Each project is broken down into phases. Completion times and the cost of each phase are estimated. Project description and related estimates are used to develop the annual research department budget. The schedule below presents the costs for the research activities budgeted for last year. Actual costs incurred by projects or overhead category are compared to estimates for each activity, and the variances are noted on this same schedule. The director of research prepared a narrative statement of research performance for the year to accompany the schedule. The director's statement follows the schedule.

"The year has been most successful. The two projects, 4-1 and 8-1, scheduled for completion in this year were finished. Project 8-2 is progressing satisfactorily and should be completed next year as scheduled. The fourth phase of project 5-3, with estimated direct research costs of $100,000, and the first phase of project 8-3, both included in the approved activity for the year, could not be started because the principal researcher left our employment. They were resubmitted for approval in next year's activity plan."

Required: From the information given, prepare an alternative schedule that will provide Argo Company management with better information to evaluate research cost performance for the year.

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Total research costs: ARGO COMPANY Profit Variance Analysis of Research Costs (in thousands) Approved Activity Actual Costs (Over) Under for the Year for the Year Budget Projects in progress: 4-1 $ 23.2 $ 46.8 $(23.6) 5-3 464.0 514.8 (50.8) New projects: 8-1 348.0 351.0 (3.0) 8-2 232.0 257.4 8-3 92.8 (25.4) 92.8 Total research costs, including the indirect costs listed below 1,160.0 1,170.0 (10.0) Indirect research costs (allocated to projects in proportion to their direct costs): Administration Laboratory facilities Total 50.0 110.0 52.0 118.0 (2.0) (8.0) $ 160.0 $ 170.0 $(10.0)