PROBLEM 9-22 Critiquing a Variance Report; Preparing a Performance Report L09-1, L09-2, L09-3, LO9-4 Several years ago, Westmont Corporation developed a comprehensive budgeting system for plan- ning and control purposes. While departmental supervisors have been happy with the system, the factory manager has expressed considerable dissatisfaction with the information being generated by the system. A report for the company's Assembly Department for the month of March follows: Assembly Department Cost Report For the Month Ended March 31 Machine-hours Variable costs: Supplies Scrap Indirect materials Fixed costs: Wages and salaries Equipment depreciation Total cost Actual Results Planning Budget Variances 35,000 40,000 $ 29,700 $ 32,000 $2,300 F 19,500 51,800 20,000 56,000 500 F 4,200 F 79,200 80,000 800 F 60,000 60,000 $240,200 $248,000 $7,800 F After receiving a copy of this cost report, the supervisor of the Assembly Department stated, "These reports are super. It makes me feel really good to see how well things are going in my department. I can't understand why those people upstairs complain so much about the reports." For the last several years, the company's marketing department has chronically failed to meet the sales goals expressed in the company's monthly budgets. Required: 1. The company's president is uneasy about the cost reports and would like you to evaluate their usefulness to the company. 2. What changes, if any, should be made in the reports to give better insight into how well depart- mental supervisors are controlling costs? 3. Using Exhibit 9-8 as your guide, prepare a new performance report for the quarter, incorporat- ing any changes you suggested in question (2) above. 4. How well were costs controlled in the Assembly Department in March?