Question

Exercise 22-13 (Part Level Submission) Fey Company's organization chart includes the president; the vice president of production; three assembly plants-Dallas, Atlanta, and Tucson; and two departments within each plant-Machining Finishing. Budget and actual manufacturing cost data for July 2017 are as follows. Finishing Department-Dallas: direct materials $42,500 actual, $44,000 budget; direct labor $83,400 actual, $82,000 budget; manufacturing overhead $51,000 actual, $49,200 budget. Machining Department-Dallas: total manufacturing costs $220,000 actual, $219,000 budget. Atlanta Plant: total manufacturing costs $424,000 actual, $420,000 budget. Tucson Plant: total manufacturing costs $494,200 actual, $496,500 budget. The Dallas plant manager's office costs were $95,000 actual and $92,000 budget. The vice president of production's office costs were $132,000 actual and $130,000 budget. Office costs are not allocated to departments and plants. v (a) Your answer is correct. Prepare the reports in a responsibility system for: The Finishing Department-Dallas. To Dallas Department Manager-Finishing Month: July Favorable Unfavorable Neither Favorable nor Unfavorable Controllable Costs: Budget Actual Direct Materials 44000 42500 1500 T Favorable Direct Labor 82000 83400 1400|| Unfavorable Manufacturing Overhead 49200 51000 1800 Unfavorable Total 175200 176900 17001T Unfavorable

Answer 1

a.	TO Dallas department manager-Finishing
	Controllable Costs:	Budget	Actual		Favorable/Unfavorable.
	Direct Material	$              44,000	$              42,500	$           1,500	Favorable
	Direct Labor	$              82,000	$              83,400	$           1,400	Unfavorable
	Manufacturing Overhead	$              49,200	$              51,000	$           1,800	Unfavorable
	Total	$         175,200	$         176,900	$         1,700	Unfavorable
b.	TO Assembly Plant Manager-Dollas
	Controllable Costs:	Budget	Actual		Favorable/Unfavorable.
	Dallas Office	$              92,000	$              95,000	$           3,000	Unfavorable
	Departments:			$                   -
	Finishing	$            175,200	$            176,900	$           1,700	Unfavorable
	Machining	$            219,000	$            220,000	$           1,000	Unfavorable
	Total	$         486,200	$         491,900	$         5,700	Unfavorable
c.	TO Vice President-Production
	Controllable Costs:	Budget	Actual		Favorable/Unfavorable.
	Vice President Production	$            130,000	$            132,000	$           2,000	Unfavorable
	Assembly plants:
	Atlanta	$            420,000	$            424,000	$           4,000	Unfavorable
	Dallas**	$            486,200	$            491,900	$           5,700	Unfavorable
	Tucson	$            496,500	$            494,200	$           2,300	Favorable
	Total	$     1,532,700	$     1,542,100	$         9,400	Unfavorable
	Dallas:	Budget	Actual
	Plant Manager's Office Costs	$              92,000	$              95,000
	Finishing Department-
	Direct Materials	$              44,000	$              42,500
	Direct Labor	$              82,000	$              83,400
	Manufacturing Overhead	$              49,200	$              51,000
	Machining Department-
	Total Manufacturing costs	$            219,000	$            220,000
	Assembly plants for Dallas	$         486,200	$         491,900

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