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	$ 9,600	$ 10,200	$ 600	F
Scrap	33,600	36,000	2,400	F
Indirect materials	97,400	115,500	18,100	F
Fixed costs:
Wages and salaries	78,700	74,000	4,700	U
Equipment depreciation	104,000	104,000	0
Total cost	$ 323,300	$ 339,700	$ 16,400	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

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?

What kind of reports should be used to give better insight into how well departmental supervisors are controlling costs?

Required 2

	Flexible budget performance reports must be usedradio button unchecked1 of 2 Fixed budget performance reports must be usedradio button unchecked2 of 2

• Required 3

• Complete the new performance report for the quarter, based on Flexible Budget Performance approach. (Do not round your intermediate calculations. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.)

  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	$9,600						$10,200
  Scrap	33,600						36,000
  Indirect materials	97,400						115,500
  Wages and salaries	78,700						74,000
  Equipment depreciation	104,000						104,000
  Total	$323,300						$339,700