Crafts Inc., is a manufacturer of furniture. The company has 4 product lines. The manager of the table segment received the following performance report for October from the CEO. The CEO contacted the Table Segment Manager and stated that they needed to meet , so that they could discuss getting this segment back on track. Table Segment Performance Report For the month of October Actual Budget Variance Units 3,000 2,800 200 F Variable Production costs: Direct material $60,000 $61,600 $1,600 F Direct labor 44,000 44,800 800 F Machine time 54,500 50,400 4100 U Production overhead 100,000 105,000 5000 F Fixed Production costs: Indirect labor 28,200 23,000 5200 U Depreciation 16,500 16,500 0 Property taxes 7,200 6,900 300 U Insurance 13,500 13,500 0 Total costs $323,900 $321,700 $2,200 U The Table segment manager heard you just finished a course that discussed flexible budgets. He has asked you to assist him in developing a performance report that compares actual numbers to a flexible budget at actual level. 1. Prepare a new performance report for October using the flexible performance approach. The variable and fixed cost labeling has been set correctly, so do not change this around. You need to designate the variances as U or F. 2. Comment on how you developed this revised report and what it means. 3. Do you think any of the variances in the report you prepared should be investigated? Why? Solution: You need to show your work either by cell reference or showing your calculation to the side. #1 Revised Table Segment Performance Report For the month of October Actual Flexible Budget Variance U or F Units Variable Production costs: Direct material Direct labor Machine time Production overhead Fixed Production costs: Indirect labor Depreciation Property taxes Insurance Total Cost 2. Comment on how you developed this revised report and what it means. 3. Do you think any of the variances in the report you prepared should be investigated? Why?