Required 1 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. 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.) 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 Results 25,000 Planning Budget 30,000 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. Variances Machine-hours Variable costs: Supplies Scrap Indirect materials Fixed costs: Wages and salaries Equipment depreciation Total cost $ 7,200 22,400 68,600 $ 7,800 24,000 79,500 $ 600 F F 1,600 F 10,900 F Required 1 Required 2 Required 3 Required 4 69,100 96,000 66,000 3,100 U 96,000 $ 273,300 $10,000 F $ 263,300 What kind of reports should be used to give better insight into how well departmental supervisors are controlling costs? After receiving a copy of this cost report, the supervisor of the Assembly Department stated, "These reports are super. It makes me Flexible budget performance reports must be used feel really good to see how well things are going in my department. I can't understand why those people upstairs complain so much Fixed budget performance reports must be used about the reports." For the last several years, the company's marketing department has chronically failed to meet the sales goals expressed in the Required 1 Required 2 Required 3 Required 4 company's monthly budgets. Complete the new performance report for the quarter, based on Flexible Budget Performance approach. (Do not round your intermediate Required: calculations. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance) 1. The company's president is uneasy about the cost reports, identify at least two reasons. Input all amounts as positive values.) 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. Westmont Corporation 4. Were costs well controlled in March? Assembly Department Flexible Budget Performance Report For the Month Ended March 31 Actual Flexible Planning Required 1 Required 2 Required 3 Required 4 Results Budget Budget Machine-hours (9) 25,000 30,000 Were costs well controlled in March? Supplies S $ 7,800 Scrap Costs were well controlled 22,400 24,000 Indirect materials 68,600 Costs were not well controlled 79,500 Wages and salaries 69,100 66,000 Equipment depreciation 96.000 96,000 Total S 263,300 $ 273,300 7,200