A report for a company's Assembly Department for the month of March follows. The operating manager in charge is not satisfied with the information generated by the system. On the other hand, department supervisors are satisfied. In this cost report, the company measures its activity in terms of machine hours. Assembly Department Cost Report For the Month Ended March 31 Actual Planning Results Budget 15,000 20,000 Variances Machine-hours $ 9,300 $ 9,900 32,200 34,500 93,800 111,000 $ 600 F 2,300 F 17,200 F Variable costs: Supplies Scrap Indirect materials Fixed costs: Wages and salaries Equipment depreciation Total cost 77,500 73,000 4,500 U 103,000 103,000 $ 315,800 $ 331,400 $15,600 F The company has failed to meet the sales goals stated in the company's monthly budgets for the last several years. Required: 1. Identify at least two reasons why the operating manager is not comfortable with the report. 2. What kind of reports should be used to give better insight into how well departmental supervisors are controlling costs? 3. Using a Flexible Budget Performance approach, complete the new performance report for the period ending March 31. 4. Were costs well controlled in March? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 The company's president is uneasy about the cost reports, identify at least two reasons. (Select "X" if the item is one of the reasons.) Cost reports are ineffective since budgeted costs at one level of activity are compared to actual costs at another level of activity. Cost reports show whether fixed costs are controlled and do not show whether variable costs are controlled Cost reports are effective since budgeted costs at one level of activity are compared to actual costs at another level of activity. Cost reports show whether fixed costs and variable costs are controlled