Several years ago, Shipley Corporation developed a comprehensive budgeting system for profit 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 typical departmental cost report for a recent period follows:

Assembly Department Cost Report For the Month Ended March 31
	Planning Budget		Actual Results		Variances
Machine-hours		30,000		25,000
Variable costs:
Supplies	$	6,900	$	6,300	$	600	F
Scrap		19,500		18,200		1,300	F
Indirect materials		66,000		57,800		8,200	F
Fixed costs:
Wages and salaries		63,000		65,500		2,500	U
Equipment depreciation		93,000		93,000