Problem 9-25 Critiquing a Variance Report; Preparing a Performance Report [LO9-1, LO9-2, LO9-3, LO9- 4, LO9-6] Several years ago, Westmont Corporation developed a comprehensive budgeting system for planning 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 Actual Planning Budget 40,000 Results Variances 35,000 Machine-hours Variable costs: $ 29,700 $ 32,000 $2,300 F 19,500 51,800 Supplies Scrap Indirect materials 20,000 56,000 500 F 4,200 F Fixed costs: 80,000 60,000 Wages and salaries Equipment depreciation 79,200 60,000 $240,200 $248,000 $7,800 F 800 F Total cost 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, identify at least two reasons. 2. What kind of reports should be used to give better insight into how well departmental supervisors are controlling costs? 3. Complete the new performance report for the quarter, based on Flexible Budget Performance approach 4. Were costs well controlled in March? 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, identify at least two reasons. 2. What kind of reports should be used to give better insight into how well departmental supervisors are controlling costs? 3. Complete the new performance report for the quarter, based on Flexible Budget Performance approach. 4. Were costs well controlled in March? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 The company's president is uneasy about the cost reports, identify at least two reasons. (Select "X" if the item is one of the reasons.) Cost reports are ineffective since budgeted costs at one level of activity are compared to actual costs at another level of activity. Cost reports show whether fixed costs are controlled and do not show whether variable costs are controlled. Cost reports are effective since budgeted costs at one level of activity are compared to actual costs at another level of activity Cost reports show whether fixed costs and variable costs are controlled. Required 1 Required 2 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, identify at least two reasons. 2. What kind of reports should be used to give better insight into how well departmental supervisors are controlling costs? 3. Complete the new performance report for the quarter, based on Flexible Budget Performance approach. 4. Were costs well controlled in March? Complete this question by entering your answers in the tabs below. Required 2 Required 1 Required 3 Required 4 What kind of reports should be used to give better insight into how well departmental supervisors are controlling costs? OFlexible budget performance reports must be used OFixed budget performance reports must be used KRequired 1 Required 3> Required 1 Required 2 Required 3 Required 4 Complete the new performance report for the quarter, based on Flexible Budget Performance approach. (Do not round your intermediate calculations. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.) Westmont Corporation Assembly Department Flexible Budget Performance Report For the Month Ended March 31 Planning Budget Actual Flexible Results Budget 40,000 35,000 Machine-hours (q) $ $ Supplies 32,000 29,700 Scrap 19,500 20,000 51,800 Indirect materials 56,000 Wages and salaries 79,200 80,000 Equipment depreciation 60,000 60,000 248,000 240,200 Total Required 2 Required 4 After receiving a copy of this cost report, the supervisor of the Assembly Department stated, "These reports are super. It makes me eel 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 ompany's monthly budgets. Required: . The company's president is uneasy about the cost reports, identify at least two reasons. 2. What kind of reports should be used to give better insight into how well departmental supervisors are controlling costs? 3. Complete the new performance report for the quarter, based on Flexible Budget Performance approach. 4. Were costs well controlled in March? Complete this question by entering your answers in the tabs below. Required 2 Required 3 Required 1 Required 4 Were costs well controlled in March? Costs were well controlled OCosts were not well controlled Required 3 Required 4