80.2K

Verified Solution

Link Copied!

rank Weston, supervisor of the Freemont Corporations Machining Department, was visibly upset after being reprimanded for his departments poor performance over the prior month. The departments cost control report is given below:

Freemont CorporationMachining Department Cost Control Report For the Month Ended June 30
	Actual Results		Planning Budget		Variances
Machine-hours		38,000		35,000
Direct labor wages	$	86,100	$	80,500	$	5,600	U
Supplies		23,100		21,000		2,100	U
Maintenance		137,300		134,000		3,300	U
Utilities		15,700		15,200		500	U
Supervision		38,000		38,000		0
Depreciation		80,000		80,000		0
Total	$	380,200	$	368,700	$	11,500	U

I just cant understand all 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 for a fact that my department worked more efficiently last month than it has ever worked before. Instead, he tore me apart. I thought for a minute that 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:Need answers to this table

2.	Complete the performance report that will help Mr. Westons superiors assess how well costs were controlled in the machining department. (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.)
	Freemont CorporationMachining DepartmentFlexible Budget Performance ReportFor the Month Ended June 30Actual ResultsSpending VariancesFlexible BudgetActivity VariancesPlanning BudgetDirect labor wages$86,100U$80,500Supplies23,100U21,000Maintenance137,300134,000Utilities1570015,200Supervision38,00038,000Depreciation80,00080,000Total$380,200$0$368,700

Answer & Explanation Solved by verified expert

See Answer