Haliburton Company sells vehicle parts to manufacturers of heavy construction equipment. The Grader Division is organized as a cost center. The budget for the Grader Division for the month ended August 31, 20Y6, is as follows (in thousands):

Line Item Description	Amount
Customer service salaries	$ 375,000
Insurance and property taxes	75,000
Distribution salaries	712,500
Marketing salaries	450,000
Engineer salaries	1,110,000
Warehouse wages	420,000
Equipment depreciation	232,500
Total	$ 3,375,000

During August, the costs incurred in the Grader Division were as follows:

Line Item Description	Amount
Customer service salaries	$ 533,600
Insurance and property taxes	71,195
Distribution salaries	680,775
Marketing salaries	537,950
Engineer salaries	1,070,463
Warehouse wages	398,605
Equipment depreciation	224,750
Total	$ 3,517,338

Required:

Question Content Area

1. Prepare a budget performance report for the director of the Grader Division for the month of August. Enter amounts in thousands (same format as the data above).

If an amount box does not require an entry, leave it blank. Use a negative sign to indicate budget deficits.

Line Item Description	Budget	Actual	Over Budget	(Under) Budget
Customer service salaries	$Customer service salaries	$Customer service salaries	$Customer service salaries	$Customer service salaries
Insurance and property taxes	Insurance and property taxes	Insurance and property taxes	Insurance and property taxes	Insurance and property taxes
Distribution salaries	Distribution salaries	Distribution salaries	Distribution salaries	Distribution salaries
Marketing salaries	Marketing salaries	Marketing salaries	Marketing salaries	Marketing salaries
Engineer salaries	Engineer salaries	Engineer salaries	Engineer salaries	Engineer salaries
Warehouse wages	Warehouse wages	Warehouse wages	Warehouse wages	Warehouse wages
Equipment depreciation	Equipment depreciation	Equipment depreciation	Equipment depreciation	Equipment depreciation
Total	$fill in the blank aace2803e019057_29	$fill in the blank aace2803e019057_30	$fill in the blank aace2803e019057_31	$fill in the blank aace2803e019057_32

Question Content Area

2. Given the data, all of the following could explain the over-budget areas except: