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 Results	Planning Budget	Variances
Machine-hours	25,000	30,000
Variable costs:
Supplies	$ 6,000	$ 6,600	$ 600	F
Scrap	16,800	18,000	1,200	F
Indirect materials	54,200	61,500	7,300	F
Fixed costs:
Wages and salaries	64,300	62,000	2,300	U
Equipment depreciation	92,000	92,000	0
Total cost	$ 233,300	$ 240,100	$ 6,800	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 cant understand why those people upstairs complain so much about the reports.

For the last several years, the companys marketing department has chronically failed to meet the sales goals expressed in the companys monthly budgets.

Required:

1. The companys president is uneasy about the cost reports, identify 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?

Complete this question by entering your answers in the tabs below. The company's president is uneasy about the cost reports, identify at least two reasons. (Select " X " if the ite reasons.) Complete this question by entering your answers in the tabs below. Complete the new performance report for the quarter, based on Flexible Budget Performance approach. (Do not round your calculations. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect Input all amounts as positive values.)