Critiquing a Variance Report
Not what you're looking for?
I need help with the following problem in the attached document.
Critiquing a Variance Report:
Several years ago, Westmont Corporation developed a comprehensive budgeting system for profit planning and control purposes. While departmental supervisors have been happy with the system, the factory manager has expressed considerable dissatisfaction with the information being generated by the system. A typical departmental cost report for a recent period follows:
Assembly Department
Cost Report
For the month ended March 31
Planning Budget Actual Results Variances
Machine-hours 40,000 35,000
Variable costs:
Supplies $ 32,000 $ 29,700 $ 2,300 F
Scrap 20,000 19,500 500 F
Indirect materials 56,000 51,800 4,200 F
Fixed costs:
Wages and salaries 80,000 79,200 800 F
Equipment depreciation 60,000 60,000 - F
Total cost $248,000 $240,200 $7,800 F
After receiving a copy of this cost report, the supervisor of the Assembly Department stated, "These reports are super. It makes me feel really good to see how well things are going in my department. I can't understand why those people upstairs complain so much about the reports."
For the last several years, the company's marketing department has chronically failed to meet the sales goals expressed in the company's monthly budgets. Answer the following questions:
? The company's president is uneasy about the cost reports and would like you to evaluate their usefulness to the company.
? What changes, if any, should be made in the reports to give better insight into how well departmental supervisors are controlling costs?
? Prepare a new performance report for the quarter, incorporating any charges you suggested in question (b) above.
? How well were costs controlled in the Assembly Department in March?
Purchase this Solution
Solution Summary
The solution explains how to prepare a useful variance report
Purchase this Solution
Free BrainMass Quizzes
Transformational Leadership
This quiz covers the topic of transformational leadership. Specifically, this quiz covers the theories proposed by James MacGregor Burns and Bernard Bass. Students familiar with transformational leadership should easily be able to answer the questions detailed below.
Employee Orientation
Test your knowledge of employee orientation with this fun and informative quiz. This quiz is meant for beginner and advanced students as well as professionals already working in the HR field.
Production and cost theory
Understanding production and cost phenomena will permit firms to make wise decisions concerning output volume.
SWOT
This quiz will test your understanding of the SWOT analysis, including terms, concepts, uses, advantages, and process.
Situational Leadership
This quiz will help you better understand Situational Leadership and its theories.