Question

Problem 10-6A (Part Level Submission) (Video) Durham Company uses a responsibility reporting system. It has divisions in Denver, Seattle, and San Diego. Each division has three production departments: Cutting, Shaping, and Finishing. The responsibility for each department rests with a manager who reports to the division production manager. Each division Manager reports to the vice president of production. There are also vice presidents for marketing and finance. All vice presidents report to the president. In January 2020, controllable actual and budget manufacturing overhead cost data for the departments and divisions were as shown below. Actual Budget Manufacturing Overhead Individual costs-Cutting Department-Seattle Indirect labor Indirect materials Maintenance Utilities Supervision $73,200 48,200 20.500 19.000 22,000 $183,800 $69,900 45,500 18,000 16,800 19,600 $169,800 Total costs Shaping Department-Seattle Finishing Department-Seattle Denver division San Diego division $157,700 210,600 672,900 721,800 $149,000 204,300 673,200 714,800 Additional overhead costs were incurred as follows: Seattle division production manager-actual costs $53,000, budget $51,400; vice president of production-actual costs $65,400, budget $63,900; president-actual costs $76.900, budget $73,900. These expenses are not allocated. The vice presidents who report to the president, other than the vice president of production, had the following expenses.

Answer 1

Ans.	To Cutting Department Manager - Seattle division				Month : January
	Controllable	Budget	Actual	Difference	Favorable or Unfavorable
	Indirect labor	$69,900	$73,200	$3,300	Unfavorable
	Indirect materials	$45,500	$48,200	$2,700	Unfavorable
	Maintenance	$18,000	$20,500	$2,500	Unfavorable
	Utilities	$16,800	$19,900	$3,100	Unfavorable
	Supervision	$19,600	$22,000	$2,400	Unfavorable
	Total controllable costs	$169,800	$183,800	$14,000	Unfavorable
	*If actual costs are greater than budgeted then the variance becomes unfavorable.
	*If actual costs are less than budgeted then the variance becomes favorable.