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 Variances Machine-hours 25,000 30,000 Variable costs: Supplies Scrap Indirect materials Fixed costst Wages and salaries Equipment depreciation Total cost $ 6,300 $ 6,900 $ 600 F 18,200 19,500 1,300 F 57,600 66,000 8,200 65,500 63,000 2,500 u 92,000 93,000 $240,800 $248,400 $7.600 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 foiled to meet the sales goals expressed in the company's monthly budgets. Required: 1. The company's president is uneasy about the cost reports, identity 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? quote 4. Were costs well controlled in March? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 The company's president is uneasy about the cost reports, Identity at least two reasons. (Select "x" ir the Item is one of the reasons.) Cost reports are ineffective uinon budgeted costs at one level of activity are compared to actual costs at another level of activity Cont reports show whether fixed costs are controlled and do not show whether variable costs are controlled Cost reports are effective since budgeted costs at one level of activity are compared to actual costs at I of activity Cost reports show whether fixed costs and variable costs are controlled another Required 2 Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required Required 4 Complete the new performance report for the quarter, based on Flexible Budget Performance approach. (Do not round your inter calculations. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (ie. 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 (9) 25,000 30,000 Supplies Scrap Indirect materials Wages and salarios Equipment depreciation Total $ 6,300 18,200 57,800 65,500 93,000 $ 240,800 $ 6.900 19,500 56.000 63,000 93,000 $ 248,400 Required 2 Required 4 >
