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PROBLEM SETB Britney Brown, the plant manager of LMN Co.'s Chicago plant, is responsible for all of that plant's costs other than her own salary. The plant has two operating departments and one service department. There frigerator and dishwasher operating departments manufacture different products and have their own agers. The office department, which Browalso manages, provides services equally to the two operating departments. A monthly budget is prepared for each operating department and the office department. The company's responsibility accounting system must assemble information to present budgeted and actual costs in performance reports for each operating department manager and the plant manager. Each perfor mance report includes only those costs that a particular operating department manager can control rew materials, wages, supplies used, and equipment depreciation. The plant manager is responsible for the department managers' salaries, utilities, building rent, office salaries other than her own, and other office costs plus all costs controlled by the two operating department managers. The April departmental budgets and actual costs for the two operating departments follow. Problem 22-1B Responsibility accounting o n e reports controllable and budgeted P1 Refrigerators Dishwashers Combined Refrigerators Dishwashers Comed $200,000 $202.000 1.500 46.500 Depl mar Supplies used Deprecation mes Building red Office department costs.... $400,000 170.000 55,000 15.000 51.000 30,000 63,000 2050 19.000 3.000 37.000 18.000 17.000 70,500 $ 500.000 250.000 104.000 24.000 90,000 48.000 80,000 141.000 $1,337,000 176700 55.000 14.000 52000 34.500 65.800 75.000 700 37.000 20 700 75 000 SAB0.500 1857 000 $1.345.900 The office department's budget and its actual costs for April follow. l=" $ 80,000 40,000 21.000 $141,000 $ 65,000 35200 23.300 $150.000 Other office costs............. Required 1. Prepare responsibility accounting performance reports like those in Exhibit 22.2 that list costs con- trolled by the following: a. Manager of the refrigerator department. b. Manager of the dishwasher department. c Manager of the Chicago plant. In cach report, include the budgeted and actual costs for the month and show the amount by which cach actual cost is over or under the budgeted amount. Analysis Component 2. Did the plant manager or the operating department managers better manage costs? Explain. Check (+$11.300 total under budget [10 Chicago plant controllable com 51.900 Total over budget PROBLEM SET B Milf & Britney Brown, the plant manager of LMN Co.'s Chicago plant is responsible for all of that plant's costs other than her own salary. The plant has two operating departments and one service department. There frigerator and dishwasher operating departments manufacture different products and have their own man apers. The office department, which Brown also manages, provides services equally to the two operating operating departments. A monthly budget is prepared for cach operating department and the office department. The company's responsibility accounting system must assemble information to present budgeted and actual costs in performance reports for each operating department manager and the plant manager. Each perfor mance report includes only those costs that a particular operating department manager can control: raw materials, wages, supplies used, and equipment depreciation. The plant manager is responsible for the department managers' salaries, utilities, building rent, office salaries other than her own, and other office costs plus all costs controlled by the two operating department managers. The April departmental budgets and actual costs for the two operating departments follow Problem 22-1B Responsibility accounting performance reports controllable and budgeted costs U2 Budget Refrigerators Dishwashers Combined Refrigerators Dishwashers Combined S Employee wages. Dept ager salary... Supplies used Depreciation Equip... $400,000 170.000 55.000 15,000 53,000 20.000 63.000 70,500 SR56 500 $200,000 80,000 19.000 9,000 37,000 18.000 17.000 20.500 $480,500 $500,000 250.000 104.000 24.000 90,000 48.000 80.000 141.000 $1,337,000 $385,000 174700 55.000 14.000 53,000 34,500 E5,800 75.000 $202,000 81.500 46,500 9.700 37,000 20,700 16,500 75,000 900 2000 5200 101.500 23,700 90.000 55.200 2.300 150,000 $15.900 Office department costs.. Totus..... $857.000 The office department's budget and its actual costs for April follow. . Plantmanager salary.... Other office salaries... Other office costs..... Budget $ 80,000 40,000 21,000 $141.000 Actual $85.000 35,200 29,800 $150,000 ..... Required 1. Prepare responsibility accounting performance reports like those in Exhibit 22.2 that list costs con- trolled by the following: a Manager of the refrigerator department. b. Manager of the dishwasher department. c. Manager of the Chicago plant. In each report, include the budgeted and actual costs for the month and show the amount by which cach actual cost is over or under the budgeted amount. Analysis Component 2. Did the plant manager or the operating department managers better manage costs? Explain. Check (1) $11.300 to under budget (14 Chicago controlable costs $3.9 total over budget
