Durham Company uses a responsibility reporting system. It has divisions in Denver, Seattle, and San Diego. Each division has three production departments: Cutting, Shaping, and Finishing. The responsibility for each department rests with a manager who reports to the division production manager. Each division manager reports to the vice president of production. There are also vice presidents for marketing and finance. All vice presidents report to the president. In January 2017, controllable actual and budget manufacturing overhead cost data for the departments and divisions were as shown below.

Problem 10-6A

Durham Company uses a responsibility reporting system. It has divisions in Denver, Seattle, and San Diego. Each division has three production departments: Cutting, Shaping, and Finishing. The responsibility for each department rests with a manager who reports to the division production manager. Each division manager reports to the vice president of production. There are also vice presidents for marketing and finance. All vice presidents report to the president. In January 2017, controllable actual and budget manufacturing overhead cost data for the departments and divisions were as shown below.

Manufacturing Overhead		Actual		Budget
Individual costsCutting DepartmentSeattle
Indirect labor		$73,400		$69,600
Indirect materials		48,000		45,600
Maintenance		20,700		17,900
Utilities		20,600		16,600
Supervision		22,000		20,000
		$184,700		$169,700

Total costs
Shaping DepartmentSeattle		$158,500		$148,700
Finishing DepartmentSeattle		211,900		204,100
Denver division		678,200		673,100
San Diego division		721,900		714,600

Additional overhead costs were incurred as follows: Seattle division production manageractual costs $52,000, budget $51,500; vice president of productionactual costs $65,300, budget $64,000; presidentactual costs $76,700, budget $74,200. These expenses are not allocated. The vice presidents who report to the president, other than the vice president of production, had the following expenses.

Vice President		Actual		Budget
Marketing		$133,700		$130,400
Finance		108,800		105,300

(a) Prepare the Manufacturing overheadCutting Department managerSeattle division responsibility report.

(b) Prepare the Manufacturing overheadSeattle division manager responsibility report.

(c) Prepare the Manufacturing overheadvice president of production responsibility report.

(d) Rank the comparative performances of division managers.

(e) Prepare the Manufacturing overhead and expensespresident responsibility report.

(f) Rank the comparative performances of vice presidents.