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: Assembly Department Cost Report For the Month Ended March 31 Actual Planning Results Budget 25,000 30,000 Variances Machine-hours $ 6,900 $ 21,000 65,000 7,500 22,500 75,000 $ 600 F 1,500 F 10,000 F Variable costs: Supplies Scrap Indirect materials Fixed costs: Wages and salaries Equipment depreciation Total cost 2,900 U 67,900 65,000 95,000 95,000 $255,800 $265,000 $ 9,200 F 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 failed to meet the sales goals expressed in the company's monthly budgets. Westmont Corporation Assembly Department Flexible Budget Performance Report For the Month Ended March 31 Actual Results 25,000 Flexible Budget 25,000 Planning Budget 30,000 Machine-hours (q) $ Supplies Scrap Indirect materials Wages and salaries Equipment depreciation 6,900 21,000 65,000 67,900 95,000 255,800 7,500 22,500 75,000 65,000 95,000 $ 265,000 | Total $ IIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIII