Westmont Corporation uses a comprehensive budgeting system for planning and control purposes. While departmental supervisors are happy with the system, the factory manager is not. A report for the company's Assembly Department for 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 25,000 Budget Variances 30,000 $ 7,500 $ 8,100 $ 600 F 23,800 25,500 1,700 F 72,200 84,000 11,800 F 70,300 97,000 67,000 3,300 U 97,000 $ 270,800 $ 281,600 $ 10,800 F After receiving this report, the supervisor of the Assembly Department stated, "These reports are super. It makes me feel 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 chronically failed to meet the sales goals expressed in the company's monthly budgets. Required: 1. The company's 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? 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, identify at least two reasons. Note: Select "X" if the item is one of the reasons. Cost reports are ineffective since budgeted costs at one level of activity are compared to actual costs at another level of activity. Cost 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 another level of activity. Cost reports show whether fixed costs and variable costs are controlled. Required 1 Required 2 Required 3 Required 4 Complete the new performance report for the quarter, based on Flexible Budget Performance approach. Note: 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 Machine-hours (q) 25,000 Supplies $ 7,500 Scrap 23,800 Indirect materials 72,200 Wages and salaries 70,300 Equipment depreciation Total 97,000 $ 270,800 Planning Budget 30,000 S 8,100 25,500 84,000 67,000 97,000 $ 281,600