1. Budget Performance Reports for A decentralized unit in which the department or division manager has responsibility for the control of costs incurred and the authority to make decisions that affect these costs.Cost Centers

   Partially completed budget performance reports for Garland Company, a manufacturer of light duty motors, follow:

   Garland Company Budget Performance ReportVice President, Production For the Month Ended November 30
   Plant	Budget		Actual		Over Budget		Under Budget
   Eastern Region	$422,700		$422,700				$0
   Central Region	304,300		301,300				(3,000)
   Western Region	(g)		(h)		(i)
   	$(j)		$(k)		$(l)		$(3,000)

   Garland Company Budget Performance ReportManager, Western Region Plant For the Month Ended November 30
   Department	Budget		Actual		Over Budget		Under Budget
   Chip Fabrication	$(a)		$(b)		$(c)
   Electronic Assembly	78,140		79,160		1,020
   Final Assembly	125,020		124,020				$(1,000)
   	$(d)		$(e)		$(f)		$(1,000)

   Garland Company Budget Performance ReportSupervisor, Chip Fabrication For the Month Ended November 30
   Cost	Budget		Actual		Over Budget		Under Budget
   Factory wages	$29,520		$31,590		$2,070
   Materials	69,260		68,780				$(480)
   Power and light	4,070		4,840		770
   Maintenance	6,450		7,060		610
   	$109,300		$112,270		$3,450		$(480)

   a. Complete the budget performance reports by determining the correct amounts for the lettered spaces (a-l) as marked above.

   a. $	g. $
   b. $	h. $
   c. $	i. $
   d. $	j. $
   e. $	k. $
   f. $	l. $

   b. Complete the following memo to Cassandra Reid, vice president of production for Garland Company, explaining the performance of the production division for November.

   MEMO To: Cassandra Reid, Vice President of Production

   The Western Region

   • Eastern Region
   • Central Region
   • Western Region
   plant has experienced a budget overrun. Its budget reveals that the Chip Fabrication
   • Chip Fabrication
   • Electronic Assembly
   • Final Assembly
   Department caused the majority of the budget overrun. The supervisor of the Chip Fabrication
   • Chip Fabrication
   • Electronic Assembly
   • Final Assembly
   Department should investigate the reasons for the budget overruns in factory wages, power and light, and maintenance
   • factory wages, materials, and maintenance
   • materials, power and light, and maintenance
   • factory wages, power and light, and maintenance
   .

   Feedback

   a. Solve for (a) & (b) from the totals for the Chip Fabrication Report.

   Solve for (c) and the remaining amounts. Amounts (d) and (g) will be the same; amounts (e) and (h) will be the same; and amounts (i) and (l) will be the same.

   b. Review what is happening within the regions and how they are performing within their budgets. Discuss possible causes for the budget overruns.

   Learning Objective 2.

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