An analysis of the overhead costs reveals that all variable costs are controllable by the manager of the Mixing Department and the 50% of the supervisory costs are controllable at the department level.

The flexible budget formula and the cost and activity for the months of July and August are as follows:

Flexible Budget Per
Direct Labor Hour Actual Costs Actual Costs
July August

Direct labor hours 6,000 7,000
Overhead costs
Variable
Indirect materials $3.50 $20,500 $25,100
Indirect labor 6.00 39,500 40,700
Factory supplies 1.00 9,600 8,200
Fixed
Depreciation $20,000 15,000 15,000
Supervision 20,000 18,000 20,900
Property taxes 5,000 12,000 12,000
Total costs $114,500 $121,900

Instructions:
(a) Prepare the responsibility reports for the Mixing Department for each month.

(b) Comment on the manager's performance in controlling costs during the two month period.

Answer

Submitted by Kumail Raza on Fri, 2012-04-13 06:07

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Data xxx working

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

An xxxxxxxx of the xxxxxxxx costs xxxxxxx that xxx xxxxxxxx xxxxx xxx controllable by xxx xxxxxxx xx the Mixing Department and the 50% of xxx supervisory xxxxx xxx xxxxxxxxxxxx at the department xxxxxx
The xxxxxxxx xxxxxx formula and xxx xxxx xxx activity for xxx months of July xxx August xxx xx xxxxxxxx
xxxxxxx
xxxxxxxx xxxxxx xxx	xxxxxx cost	xxxxxx cost	Budgeted xxxx	Budgeted cost
Direct xxxxx xxxx	xxxxxx Labor Hour	Direct xxxxx Hour	xxxxxx xxxxx Hour
xxxx	August	July	xxxxxx
Direct labor hours	xxxx	7000	xxxx	xxxx
Overhead costs
Variable
Indirect materials	$3.50	$20,500	$25,100	xxxxxxx	xxxxxxx
Indirect labor	x	xxxxxxx	$40,700	xxxxxxx	$42,000
xxxxxxx xxxxxxxx	1	xxxxxx	$8,200	xxxxxx	xxxxxx
Fixed
xxxxxxxxxxxx	$20,000	xxxxxxx	xxxxxxx	$20,000	xxxxxxx
xxxxxxxxxxx	$20,000	$18,000	$20,900	$20,000	xxxxxxx
xxxxxxxx xxxxx	xxxxxx	xxxxxxx	xxxxxxx	$5,000	$5,000
Total xxxxx	$114,600	xxxxxxxx	$108,000	xxxxxxxx
xxxxxxxxxxxxx
(a) xxxxxxx xxx xxxxxxxxxxxxxx xxxxxxx xxx xxx Mixing Department for xxxx xxxxxx
xxx Comment xx the xxxxxxxxx performance in xxxxxxxxxxx costs xxxxxx xxx xxx xxxxx xxxxxxx

JULY

xxx

Mixing Department

Responsibility Report

xxx the Month xxxxx July xxx xxxx

xxxxxxxxxxxx - - - more text follows - - -

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Answer

Submitted by Proteach on Thu, 2012-04-12 16:09

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Mixing dept responsibility report & manager's performance

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xxxxxx

xxx excel xxxxx with all xxx calculation xxx xxxxxxxx xx xxxxxxxxx

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Responsibility Report

xxxxxxxxxxxxxxxxxxxxxxxxxxxxx

While xxxxxxxxx a xxxxxxxxxxxxxx xxxxxxx xxx variance between xxx xxxxxx xxx xxx xxxxxxxx xxxxxxxxxxx is xxxxxxxxxxx xxxxx xx xxxxxx xxxxxxxx
xxxxxxxxx controllable costs are included in xxx preparation of xxxxxxxxxxxxxx xxxxxxx
Controllable xxxxx	xxxx	xxxxxx
xxxxxx	Actual	xxxxxxxx	xxxxxx	xxxxxx	Actual	Variance	xxxxxx
xxxxxxxx Level	* 6,000	* xxxxx	0.0	Favorable	x 7,000	* xxxxx	xxx	xxxxxxxxx
Indirect xxxxxxxx	x xxxxxx	* xxxxxx	x xxx	xxxxxxxxx	* xxxxxx	x 25,100	x (600)	xxxxxxxxxxx
Indirect Labor	* xxxxxx	* xxxxxx	* (3,500)	Unfavorable	x 42,000	x 40,700	* xxxxx	xxxxxxxxx
xxxxxxx Supplies	x 6,000	x xxxxx	* (3,600)	Unfavorable	x 7,000	x xxxxx	* (1,200)	xxxxxxxxxxx
xxxxxxxxxxx	x xxxxxx	x 9,000	* 1,000	xxxxxxxxx	x xxxxxx	* 10,450	x (450)	xxxxxxxxxxx	xxx xxxxxxxxxxxx xxxxxxxxxxx xxxx
xxxxx	x 79,000	x 84,600	x (5,600)	xxxxxxxxxxx	x xxxxxx	x xxxxxx	* (950)	Unfavorable

Manager's performance

xx

Manager's xxxxxxxxxxx xx xxxxxxxxxxx xxxx is xxxxxx xx xxxxxx xx comparison xx xxxx as xxx xxxxxxxxxxx variance is xxxx in xxxxxxx

However, in both xxx xxxxxxx xxx xxxxxxxxxxx variance is xxx xxxxxxx results xxxxx xxxxxxx the xxxxxx xxxxxxxxxxx being xxxx than xxx budgeted xxxxxxxxxxx

xxxx xxxxxx xxx xxxxxxxxxxxx of xxxxxxx xx controlling xxx cost.

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