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need help, i will rate!! Vanadium Audio inc is a small manufacturer of electronic musical instruments. The plant manager received the following variable factory overhead
need help, i will rate!!
Vanadium Audio inc is a small manufacturer of electronic musical instruments. The plant manager received the following variable factory overhead report for the past month of operations: Details Actual units produced: 15,000 (90\% of practical capacity) The plant manager is not pleased with the $12,320 unfavorable variable factory overhead controllable variance and has come to discuss the matter with the controller. The following discussion occurred: Plant Manager I fust received this factory report for the latest month of operations, Im not very pleased with these figures. Before theue numbers go to headquarters, you and I need to reach an understandink. Controllen Go ahead. What's the problem? Plant Manager: Whats the problem? Well, everything Look at the variance. It's too large. If I understand the accounting approsch being uved here, you are assuming that my costs are variable to the units produced. Thus, as the production volume dectines, so should these costs. Well, idont believe these costs are variable at all. I think they are fived costs. As a result. When we operate below capscity, the costs really don't go down. Im being peralized for costs I have no control over. I need this report to be redone to reflect this fact If anything, the difference between actual and budget is essentially a volume vanance. Listen, I know that you ce a team ployer. You really need to reconsider your assumptions on this one. Required: 1. Compile a 750900 word memo to darify and correctly interpret the isrues discussed. NO CITATIONS ARE REQUIREO IN THIS ASSIGNMENT 2 Subseiauently, complete 300400 word follow up postings to 2 of your aroup memben. NO CITATIONSARE REQUIRED IN THIS ASSIGNMENT Step by Step Solution
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