Question

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 $ 195,900 $ 277,000 $ 472,900 $ 194,300 $ 274,000 $ 468,300 104,400 205,400 309,800 107,000 206,800 313,800 43,700 52,300 96,000 44,600 53,700 98,300 33,800 91,400 125,200 31,700 91,600 123,300 60,500 126,500 187,000 63,000 126,500 189,500 3,800 5,800 9,600 4,200 6,500 10,700 6,600 9,600 16,200 5,500 8,900 14,400 67,750 67,750 135,500 79,550 79,550 159,100 $ 516,450 $ 835,750 $ 1,352,200 $ 529,850 $ 847,550 $ 1,377,400 The office department's annual budget and its actual costs follow. Plant manager salary Other office salaries Other office costs Totals Budget Actual $ 78,000 $ 95,000 36,500 25,200 21,000 38,900 $ 135,500 $ 159,100

Answer 1

Responsibility Accounting Performance Report
Dept. Manager, Camper Department
	For the year
	Budgeted	Actual	Over (Under) Budget
Controllable Costs
Raw material	195900	194300	-1600
Employee wages	104400	107000	2600
Supplies used	33800	31700	-2100
Equipment Depreciation	60500	63000	2500
Total	394600	396000	1400
Responsibility Accounting Performance Report
Dept. Manager, Trailers Department
	For the year
	Budgeted	Actual	Over (Under) Budget
Controllable Costs
Raw material	277000	274000	-3000
Employee wages	205400	206800	1400
Supplies used	91400	91600	200
Equipment Depreciation	126500	126500	0
Total	700300	698900	-1400
Responsibility Accounting Performance Report
Dept. Manager, Indiana Plant
	For the year
	Budgeted	Actual	Over (Under) Budget
Controllable Costs
Dept Manager Salary	96000	98300	2300
Utilities	9600	10700	1100
Building Rent	16200	14400	-1800
Office Dept Cost	135500	159100	23600
Other office salary	36500	25200	-11300
Other Office Cost	21000	38900	17900
Total	314800	346600	31800