One subunit of BlueHill Company had the following financial results last month.

LOADING...

(Click the icon to view the financialresults.)

Requirements

1.

Complete the performance evaluation report for this subunit.

2.

Based on the datapresented, what type of responsibility centre is thissubunit?

3.

Which items should be investigated if part ofmanagement's decision criteria is to investigate all variances exceeding $3,000 or 10%?

4.

Should only unfavourable variances beinvestigated? Explain.

Requirement 1. Complete the performance evaluation report for this subunit. (Enter the variances as positive numbers and the variance percent as a percentage to two decimal places. If the variance iszero, make sure to enter in a"0." Label each variance as favourable(F) or unfavourable(U) unless the variance iszero; then do not select alabel.)

Flexible

Budget

Flexible

Variance

BlueHillSubunit X

Actual

Budget

(U or F)

Direct materials

$

21,000

$

20,000

1000

Direct labour

14,250

15,000

(750)

Indirect labour

30,000

25,000

5000

Utilities

10,750

10,000

750

Depreciation

25,000

25,000

0

Repairs and maintenance

4,300

5,000

Total

$

105,300

$

100,000

% Variance

(U or F)

%

%

%

%

%

%

%

Requirement 2. Based on the datapresented, what type of responsibility centre is thissubunit?

This subunit is

a cost

a profit

a revenue

an investment

centre.

Requirement 3. Which items should be investigated if part ofmanagement's decision criteria is to investigate all variances exceeding $3,000 or 10%? (Leave any unused cellsblank.)

Requirement 4. Should only unfavourable variances beinvestigated? Explain.

Yes,

No,

because favourable variances

never need to be investigated because they increase net income

should be investigated to make sure the variance does not happen again

should be investigated to make sure they are not hurting the business in the long run