(Cost center performance) Melissa Furgeson is the production supervisor at the Pittsburgh plant of Midwest Metalworks. As plant production supervisor, Ms. Furgeson is evaluated based on her ability to meet standard production costs. At the Pittsburgh plant, the firm manufactures steel cattle panels (fence sections). The standard costs to produce a single cattle panel are given below:

a. For May 1997, compute the variance for each production cost category in the Pittsburgh plant.

b. Based on the variances computed in part

a, evaluate the performance of Mel¬ issa Furgeson. Which variances might deserve closer scrutiny by top man¬ agement? Explain.

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Metal pipe ($.20 per foot) $12.00 Paint ($10 per gallon) 2.00 Direct labor ($15 per hour) 3.00 Overhead Welding supplies $ .90 Utilities 1.10 Indirect labor Machine maintenance/repairs Equipment depreciation .80 .40 2.20 Miscellaneous Total .80 6.20 $23.20 In May 1997, the Pittsburgh plant produced 35,000 cattle panels and in- curred the following costs: Metal pipe ($.25 per foot) $507,500 Paint ($ 9.40 per gallon) 65,800 Direct labor ($14.90 per hour) 104,300 Overhead Welding supplies $34,900 Utilities 38,300 Indirect labor 25,500 Machine maintenance/repairs 21,200 Equipment depreciation 77,000 Miscellaneous 29,500 226,400 Total $904,000