Billie Whitehorse, the plant manager of Travel Frees Indiana plant, is responsible for all of that plants 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 companys 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.

Required

1. Prepare responsibility accounting performance reports like those in Exhibit 24.2 that list costs controlled by the following:

a. Manager of the camper department.

b. Manager of the trailer department.

c. Manager of the Indiana plant. In each report, include the budgeted and actual costs and show the amount that each actual cost is over or under the budgeted amount.

Analysis Component 2. Did the plant manager or the operating department managers better manage costs? Explain.

Actual Trailers Campers Combined Raw materials Employee wages Dept. manager salary. Supplies used. Depreciation --Equip. Utilities Building rent.. Office department costs.. Totals.... Budget Campers Trailers Combined $195,000 $275,000 $ 470,000 104,000 205,000 309,000 43,000 52,000 95,000 33,000 90,000 123,000 60,000 125,000 185,000 3,600 5,400 9,000 5,700 9,300 15,000 68,750 68,750 137,500 $513,050 $830,450 $1,343,500 $194,200 106,600 44,000 31,700 60,000 3,300 5,300 67,550 $512,650 $273,200 206,400 53,500 91,600 125,000 5,000 8,700 67,550 $830,950 $ 467,400 313,000 97,500 123,300 185,000 8,300 14,000 135,100 $1,343,600 The office department's annual budget and its actual costs follow. Budget Actual Plant manager salary.... Other office salaries Other office costs. $ 80,000 32,500 25,000 $137,500 $ 82,000 30,100 23.000 $135, 100 Totals