Question

Help Save & 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 Supplies Maintenance Utilities Supervision Depreciation Total 92,200 29, 300 25,600 23,300 57,880 99,800 $ 326,480 $ 89,200 26,400 23,300 21,900 57,000 99,000 $316,800 $3,000 U 2,900 U 2,300 U 1,400 u $ 9,600 "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 $18,500, the fixed component of the budgeted utilities cost is $14 Ann < Prev 17 of 17 !! Next > search o p e ô * a ..NO

Answer 1

Flexible Budget Performance Report is as prepared below:

Freemont Corporation-Machining Department
Flexible Budget Performance Report
For the Month Ended June 30
Particulars	Actual Results		Revenue and spending variances			Flexible Budget		Activity variances		Planning Budget
Machine hours	42,000		$0			42,000		-2,000		40,000
Direct labour Wages	92,200		($1,460)		F	93,660		-4,460	U	89,200
Supplies	29,300		$1,580		U	27,720		-1,320	U	26,400
Maintenance	25,600		$2,060		U	23,540		-240	U	23,300
Utilities	23,300		$1,025		U	22,275		-375	U	21,900
Supervision	57,000		$0		N	57,000		0	N	57,000
Depreciation	99,000		$0		N	99,000		0	N	99,000
Total	326,400		$3,205		U	323,195		-6,395	U	316,800

Working:

Working:
Direct labour Wages	93,660		89,200/40,000*42,000
Supplies	27,720		26,400/40,000*42,000
Maintenance	23,540		18,500+ (23,300-18,500)/40,000*42,000)
Utilities	22,275		14,400+ (21,900-14,400)/40,000*42,000)
Supervision	57,000		57,000
Depreciation	99,000		99,000
	323,195