Spitzer Specialty Furniture Bookcase Production Performance Report For the Month Ended June 30 Actual Budget Variance Units 3,000 2,500 500 F Sales Revenue $161,000 $137,500 $23,500 F Variable production expenses: Direct material 23,100 20,000 3,100 U Direct labor 18,300 15,000 3,300 u Overhead 60,200 51,250 8,950 U Fixed production expenses: Indirect labor 9,400 6,000 3,400 U Depreciation 5,500 5,500 Taxes 2,400 2,300 100 U Insurance 4,500 4,500 Administrative expense 12,000 9,000 3,000 U Marketing expense 8,300 7,000 1,300 U Research & development 6,000 4,500 1,500 V Operating profit $11,300 $12,450 ($1,150) U While distributing the performance report at the meeting, Sara remarked to Ken, "We need to talk about getting your division back on track. See me after the meeting." Ken had been so convinced that his division did well in June that Sara's remark surprised him. He spent the balance of the meeting avoiding eye contact with his fellow managers and trying to figure out what could have gone wrong. The monthly performance report was no help to him. Required a) Identify at least three weaknesses in the June production performance report. b) Discuss the behavioral implications of Sara's remark to Ken. c) Prepare a more informative production performance report for June to assist in the evaluation of Ken's division. d) Discuss how your recommended changes in reporting are likely to affect Ken's behavior