Can, u help me?

Required

1. ) Review the May performance report. Use the information given in the report and elsewhere.

• Discuss the strengths and weaknesses of the new budgetary system.
• Identify the weaknesses of the performance report, and explain how it should be revised to eliminate each weakness.

2) Prepare revised report for the Machining Department using the May data.

3.) What other changes would you make to improve Berwin's budgetary system? (CMA adapted)

darwin, Inc., is a manufacturer of small industrial tools with annual sales of approx beately $3.5 million. Sales growth has been steady during the year, and there is no "idence of cyclical demand. Production has increased gradually during the year and been evenly distributed throughout each month. The company has a sequential Processing system. The four manufacturing departments-Casting, Machining, Finish- Pig and Packaging-are all located in the same building. Fixed overhead is assigned using a plantwide rate. Berwin has always been able to compete with other manufacturers of small tools. However, its market has expanded only in response to product innovation. Thus, research and development are very important and have helped Berwin to expand as well as maintain demand. Carla Viller, controller, has designed and implemented a new budget system in response to concerns voiced by George Berwin, president. Carla prepared an annual budget that has been divided into 12 equal segments; this budget can be used to assist in the timely evaluation of monthly performance. George was visibly upset upon receiving the May performance report for the Machining Department. George exclaimed, "How can they be efficient enough to produce nine extra units every working day and still miss the budget by $300 per day?" Gene Jordan, supervisor of the Machining Department, could not understand "all the red ink" when he knew that the department had operated more efficiently in May than it had in months. Gene stated, "I was expecting a pat on the back, and instead, the boss tore me apart. What's more, I don't even know why!" Berwin, Inc. Machining Department Performance Report For the Month Ended May 31, 2008 Budgeted Actual Variance Volume in units 3,000 3,185 185 F Variable manufacturing costs: $24,000 $ 24,843 $ 843 U Direct materials 27,750 29,302 1,552 U Direct labor 33,300 35,035 1,735 U Variable overhead $85,050 $ 89,180 $4,130 U Total variable costs Fixed manufacturing costs: $ 3,300 $ 3,334 $ 34 U Indirect labor 1,500 1,500 Depreciation 300 300 Taxes 240 240 Insurance 930 1,027 97 U Other $ 6,270 $ 6,401 $ 131 U Total fixed costs Corporate costs: $ 2,400 $ 3,728 $1,328 U Research and development 3,600 4,075 475 U Selling and administrative $ 6,000 $ 7,803 $1,803 U Total corporate costs $97,320 $ 103,384 $6.064 U Total costs