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: Annembly Department Cost Seport for the Month Ended March 31 Metal Planning Results Budget 15.000 20,000 Variant Machine-hours $ 11,400 $ 12,000 $600 42,000 45,000 3,000 119,000 142.500 23.500 Variable contai Supplies Scrap Indirect materials Fixed costs Wages and salaries Equipment depreciation Total coat 85,500 10,000 5,900 110,000 110.000 3360,300 3309,500 $21, 2007 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 falled to meet the sales goals expressed in the company's monthly budgets. Required: 1. The company's president is uneasy about the cost reports, Idently 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? 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 th reasons) Cost reports are ineffectve 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 offective 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 2 > Required 1 Required 2 Required 3 Required 4 What kind of reports should be used to give better insight into how well departmental supervisors are controlling costs? Flexible budget performance reports must be used Food budget performance reports must be used 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 interme calculations. Indicate the effect of each varlance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zu variance). Input all amounts as positive values.) Westmont Corporation Assembly Department Flexible Budget Performance Report For the Month Ended March 31 Actual Flexible Planning Results Budget Budget Machine-hours (0) 15,000 20,000 Supplies Scrap Indirect matoria's Wagos and salarios Equipment doprociation Toto $ 11,400 42,000 119,000 85,900 110,000 5 368,300 12.000 45,000 142.500 80.000 110,000 5 388,500 Complete this question by entering your answers in Required 1 Required 2 Required 3 Required 4 Were costs well controlled in March? Costs were well controlled Costs were not well controlled
