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		20,000		15,000
Variable costs:
Supplies	$	11,700	$	11,100	$	600	F
Scrap		43,500		40,600		2,900	F
Indirect materials		138,000		115,400		22,600	F
Fixed costs:
Wages and salaries		79,000		84,700		5,700	U
Equipment depreciation		109,000		109,000