1.

Greene Corporation has four divisions: the assembly division, the processing division, the machining division, and the packing division. All four divisions are under the control of the vice president of manufacturing. Each division has a manager and several departments that are directed by supervisors. The chain of command runs downward from vice president to division manager to supervisor. The processing division is composed of the paint and finishing departments. The May responsibility reports for the supervisors of these departments follow.

	Budgeted*			Actual			Variance
Paint Department
Controllable costs
Raw materials	$	56,000		$	58,400		$	2,400	U
Labor		59,100			66,800			7,700	U
Repairs		6,200			5,130			1,070	F
Maintenance		4,000			3,720			280	F
Total	$	125,300		$	134,050		$	8,750	U
Finishing Department
Controllable costs
Raw materials	$	44,000		$	41,600		$	2,400	F
Labor		46,100			41,300			4,800	F
Repairs		3,530			4,010			480	U
Maintenance		2,520			3,170			650	U
Total	$	96,150		$	90,080		$	6,070	F

*Greene uses flexible budgets for performance evaluation.

Other pertinent cost data for May follow.

	Budgeted*			Actual
Cost data of other divisions
Assembly	$	387,000		$	375,700
Machining		297,000			310,400
Packing		421,950			407,100
Other costs associated with
Processing division manager		222,800			220,300
Vice president of manufacturing		135,000			143,560

*Greene uses flexible budgets for performance evaluation.

Required:

a.	Prepare a responsibility report for the manager of the processing division. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance).)

Responsibility Report
Processing Division Manager
For the Month Ended May 31
Controllable costs	Budget	Actual	Variances
Paint department
Finishing department
Other costs
Total