Question

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 and Finishing. Budget and actual manufacturing cost data for July 2017 are as follows.

Finishing Department—Dallas: direct materials $42,040 actual, $44,840 budget; direct labor $84,880 actual, $81,840 budget; manufacturing overhead $53,660 actual, $51,910 budget.

Machining Department—Dallas: total manufacturing costs $220,090 actual, $216,510 budget.

Atlanta Plant: total manufacturing costs $423,760 actual, $421,070 budget.

Tucson Plant: total manufacturing costs $493,600 actual, $496,060 budget.

The Dallas plant manager’s office costs were $96,550 actual and $92,770 budget. The vice president of production’s office costs were $132,700 actual and $130,320 budget. Office costs are not allocated to departments and plants.

Prepare the reports in a responsibility system for: The Finishing Department—Dallas.

Answer 1

To Dallas Department Manager—Finishing
Controllable Costs:	Budget	Actual
Direct materials	44840	42040	2800	Favorable
Direct labor	81840	84880	3040	Unfavorable
Manufacturing overhead	51910	53660	1750	Unfavorable
Total	178590	180580	1990	Unfavorable