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 th 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 Machine-hours Variable costs: Supplies Scrap Indirect materials Fixed costs: Wages and salaries Equipment depreciation Total cost Actual Planning Results 15,000 Budget 20,000 Variances $ 11,400 42,000 119,000 $ 12,000 45,000 142,500 $ 600 F 3,000 F 23,500 F 85,900 110,000 $368,300 80,000 5,900 U 110,000 0 $389,500 $21,200 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. Actual Results Machine-hours (q) 15,000 Supplies $ 11,400 Scrap 42,000 Indirect materials 119,000 Wages and salaries i 85,900 Equipment depreciation Total Westmont Corporation Assembly Department Flexible Budget Performance Report For the Month Ended March 31 110,000 $ 368,300 Flexible. Planning Budget Budget 20,000 $ 12,000 45,000 142,500 80,000 110,000 $ 389,500