Microsoft Word - 310_quiz6_s16

Prepare a performance (i.e., responsibility) report, in good form, that top management at Prescott can use to assess how well the company controlled its conversion costs during 2016.

ACCT 310 - Quiz 6 Spring 2016 Prior to the beginning of 2016, Joan Billings, controller for Prescott Manufacturing Company, prepared the following budget for the company's conversion costs during that year: Budget Direct labor hours 100,000 Direct labor (all variable) $ 1,000,000 Supervision (all fixed) 180,000 Utilities (1/6 fixed) 18,000 Depreciation (all fixed) 225,000 Supplies (all variable) 25,000 Maintenance (1/12 fixed) 240,000 Rent (all fixed) 120,000 Other (1/6 fixed) 60,000 Total conversion costs $ 1,868,000 For purposes of budgeting and performance evaluation, all conversion costs are considered to be either true variable or true fixed costs with regard to direct labor hours. The proportion of variable and fixed costs at 100,000 direct labor hours is shown parenthetically for each cost category. The relevant range for the cost behavior relationships reflected in the budget is 80,000 to 125,000 direct labor hours. All conversion costs are controllable at the company level. Actual results for 2016 were: Actual Direct labor hours 112,000 Direct labor $ Supervision 963,200 190,000 Utilities ($2,800 fixed) 20,500 Depreciation 225,000 Supplies 24,640 Maintenance ($23,000 fixed) 237,000 Rent 120,000 Other ($11,500 fixed) 60,500 1 Required: Prepare a performance (i.e., responsibility) report, in good form, that top management at Prescott can use to assess how well the company controlled its conversion costs during 2016. In preparing the report, use the style conventions for accounting reports (regarding issues such as report heading, use of dollar signs and rulings, justification of numbers and labels within cells, use of row labels and column headings) that are posted on the course website and that were applied in the computer spreadsheet project. Do not use any abbreviations in the report. The report should be prepared with either word-processing or spreadsheet computer software. Use oneinch margins and a 12-point font and construct the report so it can be printed on one side of a single page. Construction of the report should be your own work. Copying any part of another person's computer file is cheating. Provide complete, systematic, and neat documentation of all computations required to determine the figures found on the performance report. No credit will be given for figures requiring computations unless adequate documentation of those computations is displayed within the quiz solution. Prepare the computations with wordprocessing or spreadsheet software and show them on pages separate from the body of the report. If you use spreadsheet software, set the print range so that the formatting of the printed hard copy of your solution complies with the above requirements. The quiz is due no later than 9:00 p.m. on Tuesday, May 10. No late quizzes will be accepted. Submit your solution by e-mail (to: nace.magner@wku.edu) in Word, Excel, or pdf format. Use the phrase \"ACCT 310 - Quiz 6 [Your Last Name]\" as the subject line of the message. Because the corrected quiz will not be returned to you before the final examination, please keep a copy of your solution so that you can check it against the solution that will be posted on the course website shortly after the 9:00 p.m. deadline on May 10. 2