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Section B(70 marks) Assessment Question 1: Budgetary Control and Responsibility Accounting(45 marks) Soap It Fever is a consumer product company.TheCompany operates in two product segments: Oral, Personal and Home Care, and Pet Nutrition. The Oral, Personal and Home Care product segment is operated through five geographic segments, which include North America, Latin America, Europe, Asia Pacific and Africa/Eurasia. It is engaged in oral care business with toothpaste and manual toothbrush brands around the world. The Company's oral care products include Colgate Total, Colgate Sensitive Pro-Relief, Colgate Max Fresh, Colgate Maximum Cavity Protection plus Sugar Acid Neutralizer, Colgate Optic White and Colgate Luminous White toothpastes, Colgate 360 degree and Colgate Slim Soft manual toothbrushes and Colgate Optic White, Colgate Total and Colgate Plax mouthwashes. The Company is also engaged in various product categories of the personal care market with operations in liquid hand soap, which it sells under the SOPaZy and SOAPKidZbrands. The Company's personal care products also include SOAPKidZ, Sanex and Softsoap brand shower gels, SOAPKidZ, Irish Spring and SOPaZy bar soaps and SOAPMumZ deodorants and antiperspirants. The Company's personal care business outside New Zealand includes SOPaZy and KaprIz shampoos and conditioners. The Company manufactures and markets a range of products for the home care market. The manufacturing overhead budget for Soap It Fever Company contains the following items. Variable costs Fixed costs Indirect materials $ 22,000.00 Supervision $ 17,000.00 Indirect labour $ 12,000.00 Inspection costs $1,000.00 Maintenance expense $ 10,000.00 Insurance expense $2,000.00 Maintenance supplies $6,000.00 Depreciation $ 15,000.00 Total variable $ 50,000.00 Total fixed $ 35,000.00 The budget was based on an estimated 2,000 units being produced. During the past month, 1,500 units were produced, and the following costs incurred: Variable costs Indirect materials $ 22,500.00 Fixed costs Indirect labour $ 13,500.00 Supervision $ 18,400.00 Maintenance expense $8,200.00 Inspection costs $1,200.00 Maintenance supplies $5,000.00 Insurance expense $2,200.00 Depreciation $ 14,700.00 Total variable $ 49,200.00 Total fixed $ 36,500.00 Required: 1 Determine which items would be controllable by Anabelle Rose, the production manager.(5 marks) Answer 2 How much should have been spent during the month for the manufacutre of the 1,500 units?(5 marks) Answer 3 Prepare a flexible manufacutring overhead budget report for Mrs. Rose.(15 marks) Answer Soap It Fever Production Department Manufacturing Overhead Flexible Budget Report for the month ended Variable Cost Budget at 1,500 units Actual at 1,500 units Difference (Favourable(F) /Unfavourable (UF)) Indirect materials Indirect labour Maintenance expense Maintenance supplies Total Variable costs Fixed Cost Supervision Inspection cost Insurance expense Depreciation Total fixed cost Total costs 4 Prepare a responsibility report. Assume that the supervision cost above includes Mrs. Rose salary of $10,00 both at budget and actual.(15 marks) Answer Soap It Fever Production Department Manufacturing Overhead ResponsibilityReport for the month ended Controllable Cost Budget Actual Difference (Favourable(F) /Unfavourable (UF)) Indirect materials Indirect Labour Supervision Maintenance expense Inspection costs Total 5 In an attached memo to part (4), describe clearly for Mrs. Rose the areas in which her performance needs to be improved.(5 marks) Answer

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