21-4A Responsibility accounting performance reports; controllable and budgeted costs L.O. C4, P4 Billie Whitehorse, the plant manager of Travel Free's Ohio 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 $196,200 $275,800 $472,000 $195,100 $273,400 $468,500 Employee wages 105,900 205,800 311,700 106,800 206,600 313,400 Dept. manager salary 44,000 52,300 96,300 44,800 53,400 98,200 Supplies used 33,400 90,800 124,200 32,300 91,900 124,200 DepreciationEquip. 61,500 126,500 188,000 60,600 126,500 187,100 Utilities 4,400 6,000 10,400 3,600 5,900 9,500 Building rent 6,900 9,800 16,700 5,300 9,200 14,500 Office department costs 65,750 65,750 131,500 67,550 67,550 135,100 Totals $518,050 $832,750 $1,350,800 $516,050 $834,450 $1,350,500 -------------------------------------------------------------------------------- The office departments annual budget and its actual costs follow: Budget Actual Plant manager salary $80,000 $115,000 Other office salaries 36,500 34,100 Other office costs 28,000 21,000 Totals $144,500 $170,100 -------------------------------------------------------------------------------- Requirement 1: Prepare responsibility accounting performance reports like those in Exhibit 21.28 that list costs controlled by the following. In each report, include the budgeted and actual costs and show the amount that each actual cost is over or under the budgeted amount. (Leave no cells blank - be certain to enter "0" wherever required. Negative amounts should be indicated by a minus sign. Omit the "$" sign in your response. ) a. Manager of the camper department. Responsibility Accounting Performance Report Manager, Camper Department For the year Budgeted Amount Actual Amount Over (Under) Budget Controllable Costs Raw materials $ $ $ Employee wages Supplies used DepreciationEquipment Totals $ $ $ -------------------------------------------------------------------------------- b. Manager of the trailer department. Responsibility Accounting Performance Report Manager, Trailer Department For the year Budgeted Amount Actual Amount Over (Under) Budget Controllable Costs Raw materials $ $ $ Employee wages Supplies used DepreciationEquipment Totals $ $ $ -------------------------------------------------------------------------------- c. Manager of the Ohio plant. Responsibility Accounting Performance Report Manager, Ohio Plant For the year Budgeted Amount Actual Amount Over (Under) Budget Controllable Costs Dept. manager salaries $ $ $ Utilities Building rent Other office salaries Other office costs Camper department Trailer department Total $ $ $ --------------------------------------------------------------------------------