Several years ago, Westmont Corporation developed a comprehensive budgeting system for planning and control purposes. While departmental supervisors have been happy with the system, the factory manager has expressed considerable dissatisfaction with the information being generated by the system.

A report for the company's Assembly Department for the month of March follows:

Assembly Department Cost Report For the Month Ended March 31
	Actual Results		Planning Budget		Variances
Machine-hours		15,000		20,000
Variable costs:
Supplies	$	8,700	$	9,300	$	600	F
Scrap		29,400		31,500		2,100	F
Indirect materials		86,600		102,000		15,400	F
Fixed costs:
Wages and salaries		75,100		71,000		4,100	U
Equipment depreciation		101,000		101,000
Total cost	$	300,800	$	314,800	$	14,000	F

After receiving a copy of this cost report, the supervisor of the Assembly Department stated, These reports are super. It makes me feel really good to see how well things are going in my department. I cant understand why those people upstairs complain so much about the reports.

For the last several years, the companys marketing department has chronically failed to meet the sales goals expressed in the companys monthly budgets.

Required:

1. The companys 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 Complete the new performance report for the quarter, based on Flexible Budget Performance approach. (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 Flexible Budget Actual Results 15.000 Planning Budget 20,000 Machine-hours (9) $ 8,700 Supplies Scrap Indirect materials Wages and salaries Equipment depreciation Total 29,400 86,600 75,100 101,000 $ 300,800 $ 9.300 31,500 102,000 71,000 101,000 $ 314.800