Frank Western, supervisor of the Machining Department for Fremont Company, was visibly upset after being reprimanded for his department's poor performance over the prior month. The department's performance report is given below: Fremont Company Overhead Performance Report - Machining Department Machine-hours... Variable Overhead costs: Indirect Labour.. Supplies. Utilities. Maintenance. Total Variable Overhead Costs.. Fixed Overhead Costs: Supervision.. Maintenance. Depreciation. Cost Formula (Budgeted) Per Machine-hr Total Fixed Overhead. Total Overhead Cost.... $2.30.... 0.60. 0.40.. 1.20. 4.50. Actual .38.000 86,500.. 26,000 15,700. 44,900 173,100. 38,000.. .92.400. 80,000. 210.400. .383.500. Budget 35.000 38,000. .92,000. Variance .80.500.... 21,000. 14,000. 42,000. 157,500 15,600U 80,000. 210,000. 367.500. 6.000U 5,000U 1,700U 2,900U 400U 400U 16.000U "I just can't understand all the red ink," said Western to Sarah Mason, supervisor of another department. "When the boss called me in, I thought he was going to give me a pat on the back because I know for a fact that my department worked more efficiently last month than it has ever worked before. Instead he tore me apart. I thought for a minute that it might be over the supplies that were stolen out of the warehouse last month. But

Frank Western, supervisor of the Machining Department for Fremont Company, was visibly upset after being reprimanded for his department's poor performance over the prior month. The department's performance report is guven below: Fremont Company Overhead Performance Report-Machining Department "I just can't undetstand all the red ink," said Western to Sarah Mason, supervior of another department. "When the boss called me in, I thought he was going to give me a pat on the back because " Know for a fact that my departinent worked more efticiently that mouth thum it has ever worked before. Instead he tore me apart. I thought for a minute that it micht be over the aupolies that were itolen out of the warehouse last month. But "I just can't understand all the red ink," said Western to Sarah Mason, supervisor of another department. "When the boss called me in, I thought he was going to give me a pat on the back because I know for a fact that my department worked more efficiently last month than it has ever worked before. Instead he tore me apart. I thought for a minute I that it might be over the supplies that were stolen out of the warehouse last month. But they only amounted to a couple thousand of dollars, and just look at this report. Everything is unfavourable, and 1 don't even know why." Required (1) Evaluate the overhead performance report given above and explain why the variances are all unfavourable. (2) Prepare a new overhead performance report that will help Mr Western's superiors assess efficiency and cost control in the machining department Frank Western, supervisor of the Machining Department for Fremont Company, was visibly upset after being reprimanded for his department's poor performance over the prior month. The department's performance report is guven below: Fremont Company Overhead Performance Report-Machining Department "I just can't undetstand all the red ink," said Western to Sarah Mason, supervior of another department. "When the boss called me in, I thought he was going to give me a pat on the back because " Know for a fact that my departinent worked more efticiently that mouth thum it has ever worked before. Instead he tore me apart. I thought for a minute that it micht be over the aupolies that were itolen out of the warehouse last month. But "I just can't understand all the red ink," said Western to Sarah Mason, supervisor of another department. "When the boss called me in, I thought he was going to give me a pat on the back because I know for a fact that my department worked more efficiently last month than it has ever worked before. Instead he tore me apart. I thought for a minute I that it might be over the supplies that were stolen out of the warehouse last month. But they only amounted to a couple thousand of dollars, and just look at this report. Everything is unfavourable, and 1 don't even know why." Required (1) Evaluate the overhead performance report given above and explain why the variances are all unfavourable. (2) Prepare a new overhead performance report that will help Mr Western's superiors assess efficiency and cost control in the machining department