QUESTION 4 Mr. Aswad is a cost controller for XYZ Lid. He has produces a cost report for Machining Department in the monthly departmental meeting (MDM) and as a result of poor performance, Mr. Zaki as the Head of Machining Department was reprimanded. The following is the cost control report which was tabled to MDM recently. Machine hours Wages Cost Control Report November 2020 - Machining Department Actual Results Planning Budget Variances 41,000 38,000 89.100 83,500 5.600 U 26,100 24,000 2,100 U 140,300 137,000 3,300 U 18,700 18,200 500 U 41.000 41.0000 84 000 85,000 1,000 F Supplies Maintenance utilities Supervision Depreciation After evaluating the report, Mr Zaki puzzled why there were lots of unfavorable variances EXCEPT for depreciation. All the costs items are under his department except for depreciation where the figure was given by the Accounting Department. Mr. Zaki believed that his department was very effective in the period under review and wanted Mr Aswad to check again the report Further information, wages and supplies are variable costs, supervision and depreciation are fixed costs. And mantenance and utilities are mixed costs The lixed components of the budgeted maintenance is RM 95.000 whereas the fixed components of the budgeted utilities cost is RM 14,700 a) Evaluate the Machining Department's cost control report and explain why all variances EXCEPT depreciation were unfavorable. (4 marks) b) Prepare a performance report the Machining Department. (12 marks) c) Based on the Performance Report, evaluate the performance of the Machining Department (4 marks) d) "Usually fixed cost remains static but in this case the depreciation figure had changed from RM 85,000 to RM 84.000". Provide possible reasons for that. (2 marks) e) Discuss TWO common errors in preparing flexible budget (3 marks) (Total: 25 marks)