Question

Frank Weston, supervisor of the Freemont Corporation's Machining Department, was visibly 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 42,000 40,000 Direct labor wages $ 79,200 $ 77,200 $2,000 U 1,900 U 2,400 U 1,500 U upplies Maintenance Utilities Supervision Depreciation Total 24,300 23,700 21,400 47,000 79,000 22,400 21,300 19,900 47,000 79,e00 $ 274,60e $266,800 $7,800 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 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 $14,500; the fixed component of the budgeted utilities cost is $13,400 Required 2. Complete the performance report that will help Mr. Weston's superiors assess how well costs were controlled in the machining department. (Round your intermediate calculations to 2 decimal places. 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 Corporation-Machining Department Flexible Budget Performance Report For the Month Ended June 30 Actual Results Flexible Budget Planning Budget Machine-hours 42,000 40,000 Direct labor wages Supplies Maintenance Utilities Supervision Depreciation Total $ 79,200 24,300 23,700 21,400 47,000 79,000 $ 274,600 $ 77,200 22,400 21,300 19,900 47,000 79,000 $ 266,800

Answer 1

	Actual results	Spending variances		Flexible budget	Activity variances		Planning budget
Machine hours	42000			42000			40000
Direct labor wages	79200	1860	F	81060	3860	U	77200
Supplies	24300	780	U	23520	1120	U	22400
Maintenance	23700	2060	U	21640	340	U	21300
Utilities	21400	1280	U	20120	220	U	19900
Supervision	47000	0	None	47000	0	None	47000
Depreciation	79000	0	None	79000	0	None	79000
Total	274600	2260	U	272340	5540	U	266800