Chapter 24 Performance Measurement and Responsibility Accounting The office department's budget and its actual costs for April follow. Budget Actual Plant manager salary ........... Other office salaries .......... Other office costs..... Totals.............. $ 80,000 40,000 21,000 $141,000 $ 85,000 35,200 29,800 $150,000 Pequired . Prepare responsibility accounting performance reports like those in Exhibit 24.2 that list costs con- trolled by the following. a. Manager of the Refrigerator department. b. Manager of the Dishwasher department. c. Manager of the Chicago plant. In each report, include the budgeted and actual costs for the month and show the amount by which each actual cost is over or under the budgeted amount. alysis Component Did the plant manager or the operating department managers better manage costs? "JUNI COSE? PROBLEM SET B Britney Brown, the plant manager of LMN Co.'s Chicago plant. her than her own salary. The plant has two operating depart Refrigerator and Dishwasher or shwasher operating departments manufact nagers. The office department, which Brown also mana ing departments. A monthly budget is prepared for each operating departme The company's responsibility accounting system must assemb actual costs in performance reports for each operating department manager a performance report includes only those costs that a particular operat raw materials, wages, supplies used, and equipment depreciation. The plant manager is respo department managers' salaries, utilities alities, building rent, office salaries other than her own, and other office costs plus all costs controlled by the ty by the two operating department managers. The April departmental budgets and actual costs for the two operating departments follow. Co's Chicago plant is responsible for all of that plant's costs Wo operating departments and one service department. The departments manufacture different products and have their own Brown also manages, provides services equally to the two operat prepared for each operating department and the office department counting system must assemble information to present budgeted and each operating department manager and the plant manager. Each ular operating department manager can control: Problem 24-1B Responsibility accounting performance reports: controllable and budgeted costs Budget Actual Dishwashers Combined Refrigerators Dishwashers Combined $202,000 81,500 46,500 9,700 Raw materials ........... Employee wages ........ Dept. manager salary..... Supplies used....... Depreciation-Equip..... Utilities Building rent Office department costs... Totals.................. $400,000 170,000 55,000 15,000 53,000 30,000 63,000 70,500 $856,500 $200,000 80,000 49,000 9,000 37,000 18,000 17,000 70,500 $480,500 $ 600,000 250,000 104,000 24,000 90,000 48,000 80,000 141,000 $1,337,000 $385,000 174,700 55,000 14,000 53,000 34,500 65,800 75,000 $857,000 37,000 20,700 16,500 75,000 $488.900 $ 587,000 256,200 101,500 23,700 90,000 55,200 82,300 150.000 $1,345.900
