Question

Saved Problem 22-1A Responsibility accounting performance reports; controllable and budgeted costs LO P1 Billie Whitehorse, the plant manager of Travel Free's Indiana plant, is responsible for all of that plant's costs other than her own salary. The plant has two operating departments and one service department. The camper and trailer operating departments manufacture different products and have their own managers. The office department, which Whitehorse also manages, provides services equally to the two operating departments. A budget is prepared for each operating department and the office department. The company's responsibility accounting system must assemble information to present budgeted and actual costs in performance reports for each operating department manager and the plant manager. Each performance report includes only those costs that a particular operating department manager can control: raw materials, wages, supplies used, and equipment depreciation. The plant manager is responsible for the department managers' salaries, utilities, building rent, office salaries other than her own, and other office costs plus all costs controlled by the two operating department managers. The annual departmental budgets and actual costs for the two operating departments follow. Raw materials Employee wages Dept. manager salary Supplies used Depreciation-Equip. Utilities Building rent Office department costs Totals Budget Actual Campers Trailers Combined Campers Trailers Combined $ 195,200 $275,200 $ 478.400 $ 195, 109 S274.000 $ 469.180 104, 109 205,600 309,700 107,200 206,800 314,000 43,700 52,000 95,700 44,500 53,109 97,600 34,000 91,000 125,000 32,900 91,600 124,500 62,000 126,000 188,000 63,eee 125,500 188, see 3,800 5.400 9.2ee 3,600 6,500 10,100 6,300 9600 15,900 5,209 8,600 • 13,800 69,752 69,750 139,500 73,550 23,550 147,180 $ 518,850 $ 834,550 $ 1,353,400 $ 525,050 $ 839,650 $ 1,364,700 The office department's annual budget and its actual costs follow Plant manager salary Other office salaries other office costs Totals Budget Actual $ 87,000 $1e1, 32.500 26,900 20,000 19,200 $ 139,500 5 147,100 Required: 1. Prepare responsibility accounting performance reports that list costs controlled by the following. In each report, include the budgeted and actual costs and show the amount that each actual cost is over or under the budgeted amount. a. Manager of the camper department b. Manager of the trailer department. c. Manager of the Indiana plant.

Answer 1

a.	Camper Department
		Budgeted Amount	Actual Amount	Over / (under) Budget
	Controllable cost:
	Raw materials	$       1,95,200	$       1,95,100	$           -100
	Employee wages	$       1,04,100	$       1,07,200	$         3,100
	Supplies used	$           34,000	$           32,900	$       -1,100
	Depreciation Equipment	$           62,000	$           63,000	$         1,000
	Total	$       3,95,300	$       3,98,200	$         2,900
b.	Trailer Department
		Budgeted Amount	Actual Amount	Over / (under) Budget
	Controllable cost:
	Raw materials	$       2,75,200	$       2,74,000	$       -1,200
	Employee wages	$       2,05,600	$       2,06,800	$         1,200
	Supplies used	$           91,000	$           91,600	$            600
	Depreciation Equipment	$       1,26,000	$       1,25,500	$           -500
	Total	$       6,97,800	$       6,97,900	$            100
c.	Indiana Plant
		Budgeted Amount	Actual Amount	Over / (under) Budget
	Department manager salary	$           95,700	$           97,600	$         1,900
	Utilities	$             9,200	$           10,100	$            900
	Building rent	$           15,900	$           13,800	$       -2,100
	Other office salaries	$           32,500	$           26,900	$       -5,600
	Other office costs	$           20,000	$           19,200	$           -800
	Camper Department	$       3,95,300	$       3,98,200	$         2,900
	Trailer Department	$       6,97,800	$       6,97,900	$            100
	Total	$     12,66,400	$     12,63,700	$       -2,700