Carol Morgan manages the production division of Stuart Corporation. Ms. Morgan's responsibility report for the month of August follows. The budget had called for 5,100 pounds of raw materials at $4,70 per pound, and 5,100 pounds were used during August, however, the purchasing department paid $570 per pound for the materials. The wage rate used to establish the budget was $2100 per hout. On August 1, however, it increased to $24.00 as the result of an inflation index provision in the union contract. Furthermore, the purchasing department did not provide the materials needed in accordance with the production schedule, which forced Ms. Morgan to use 110 hours of overtime at a $3600 rate. The projected 480 hours of labor in the budget would have been suthcient had it not been for the 110 hours of overtime. In other words, 590 hours of labor were used in August. Required 0. When confronted with the unfavorable vartances in her responsibility report, Ms. Morgan argued that the report was unfair because it heid her accountable for matenals and labor variances that she did not control. Is she correct? b. Calculate the variances of the items Ms. Morgan controlled during the period Complete this question by entering your answers in the tabs below. When confronted with the unfavorable variances in her responsibility report, Ms. Morgan argued that the repart was unfalit because it held her accountable for materials and labor variances that shin did not control. Carol Morgan manages the production division of Stuart Corporation. Ms. Morgan's responsibility report for the month of August follows: The budget had called for 5,100 pounds of raw materials at $4,70 per pound, and 5,100 pounds were used during August, however. the purchasing department paid $570 per pound for the materials. The wage rate used to establish the budget was $2100 per hour On August 1, however, it increased to $2400 as the result of an inflation index provision in the union contract Furthermore, the purchasing department did not provide the materials needed in accordance with the production gchedule, which forced Ms. Morgan to use 110 hours of overtime at a $36.00 rate. The projected 480 hours of labor in the budget would have been sufficient had it not been for the 110 hours of overtime in other words, 590 hours of labor were used in August. Required o. When confronted with the unfavorable variances in her responsibility report. Ms. Morgan argued that the report was unfair because it held her accountable for materials and labor variances that she did not control. Is she correct? b. Calculate the variances of the items Ms Morgan controlied during the period Complete this question by entering your answers in the tabs below. Calculate the variances of the items Ms, Morgan controlled during the period. Note: Indicate the effect of each variance by selecting favorable, unfavorable, of "None" for no effect (li.e. zero variance)
