+ 5 Belmont Industries manufactures Insulation for residential use. They have received the G Manufacturing Budget Report from their accountant as the managers gather to start their 7 review of 2020 results. The manufacturing manager is certain the results are 8 under performing by a larger degree than the report has identified based on his past 9 10 experience in running this department and is saying the main issue is that Marketing has set 11 the per unit selling price too low. The accountant tells them everything is fine as the overall 12 variance is only 16% less than the 5% benchmark) and adjustments are not required for 13 14 Belmont Industries 15 Manufacturing Budget Report 16 For the Year Ending December 31, 2020 17 15 Budget Actual Variance 19 Activity Level units 5,000 5,200 30 Sales 60,000 58,650 1,350 21 Less: Couts 22 Variable manufacturing of 16,000 16.380 380 u 23 Fed manufacturing cost: 17,500 17.000 SOO 24 Variable selling & admin 10.000 10,660 660 U 25 Foed selling & admin 11,750 11,000 750 26 Total costs 55,250 55,000 1.410 7 28 Net position 4250 3610 1.140 U 19 30 What type of budget has the accountant used and what is one major issue in using this 12 type of budget? (1 mark) 35 Type of Budget the accountant prepared (provided above)? ANWSER 14 5 Disadvantages of this type of budgetine 0 1 2 3 b. Prepare a flexible budget report using the same actual results as reported in the accountant's original report. 7 marks) 5 6 Belmont Industries Manufacturing Budget Report For the Year Ending December 31, 2020 5 - 0 Budget Actual Variance U/E 2 65 66 67 Provide comments based on the original Budget Report as compared to the report you prepared in bart b. 12 marks Do you agree with the accountant that there are no major issues? Or do you agree with the Manager who believes there are issues with the results? I agree with the (Manager or Accountant ANWSER Why do you agree with that individual? What do you think needs further investigation? 68 69 70 71 72 73 74 75 76 Bid Assuming the Manufacturing manager has control over the following line items: 4 85 Sales Variable manufacturing costs Fored manufacturing costs Variable selling & admin Ford selling & admin Division Other Manager Managers Control No control Control No control Control No control No control Control No control Control 32 Complete the following requirements. [7 marks) What are the three types of responsibility centres? ANWSER ANWSER ANWSER 91 92 sa 94 95 96 97 se 99 100 101 102 103 ANWSER What type of responsibilty centre is this? Prepare a responsibility report using the information associated with 5,200 level of activity for December 31, 2020 104 Belmont industries Manufacturing Division Responsibility Report For the Year Ending December 31, 2020 Budget Actual Varance X U/F 105 106 107 100 105 110 111 112 113 Working Space 115 116 112 118 119 120 121