50.1K

Verified Solution

Link Copied!

Frank Weston, supervisor of the Freemont Corporation$$s Machining Department, was upset after being reprimanded for his department$$s poor performance over the prior month. The department$$s cost control report is given below:

Freemont Corporation$$Machining Department

Cost Control Report

For the Month Ended June $30$

Actual Results Planning Budget Variances

Machine$-$hours $38,00035,000$

Direct labor wages $ $86,100$ $ $80,500$ $ $5,600$ U

Supplies $23,10021,0002,100$ U

Maintenance $137,300134,0003,300$ U

Utilities $15,70015,200500$ U

Supervision $38,00038,0000$

Depreciation $80,00080,0000$

Total $ $380,200$ $ $368,700$ $ $11,500$ U

$$I just can$$t understand all of these unfavorable variances,$$ Weston complained to the supervisor of another department. $$When the boss called me in$,$ I thought he was going to give me a pat on the back because I know my department worked more efficiently last month than ever before. Instead, he tore me apart. I thought for a minute it might be over the supplies that were stolen out of our warehouse last month. But they only amounted to a couple of hundred dollars, and just look at this report. Everything is unfavorable.$$

Direct labor wages and supplies are variable costs; supervision and depreciation are fixed costs; and maintenance and utilities are mixed costs. The fixed component of the budgeted maintenance cost is $$92,000$; the fixed component of the budgeted utilities cost is $$11,700.$

Required:

$2.$ Complete the performance report that will help Mr$.$ Weston$$s superiors assess how well costs were controlled in the machining department.

Answer & Explanation Solved by verified expert

See Answer