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 15,000 20,000 Variable costs: Supplies $ 8,700 $ 9,300 $ 600 F Scrap 29,400 31,500 2,100 F Indirect materials 86,600 102,000 15,400 F Fixed costs: Wages and salaries 75,100 71,000 4,100 U Equipment depreciation 101,000 101,000 0 Total cost $ 300,800 $ 314,800 $ 14,000 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?

Westmont Corporation
Assembly Department
Flexible Budget Performance Report
For the Month Ended March 31
	Actual Results			Flexible Budget			Planning Budget
Machine-hours (q)	15,000						20,000
Supplies	$8,700						$9,300
Scrap	29,400						31,500
Indirect materials	86,600						102,000
Wages and salaries	75,100						71,000
Equipment depreciation	101,000						101,000
Total	$300,800						$314,800