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    Responsibility accounting report

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    The milton corporation has 4 divisions: the assembly, processing, machining, and packaging division. All 4 divisions are under control of the vice president of manufacturing. Each division has a manager and several departments that are directed by supervisors. The chain of command runs downward from vice president to division manager to supervisor. The processing division is composed of the paint and finishing departments. The May responsibility reports for the supervisors of these departments follow:


    budgeted actual variance

    Paint dept
    controllable cost
    raw materials $25,900 $27,000 $1,100U
    labor 57,700 64,000 6,300U
    repairs 4,800 3,870 930U
    maint 2,600 2,460 140F
    total $91,000 $97,330 $6,330U

    Finishing Dept
    controllable cost
    raw materials $22,810 $22,560 $250F
    labor 43,300 39,900 3,400F
    repairs 2,830 3,170 340U
    maint 1,680 2,050 370U
    total $70,620 $67,680 $2,940F

    budgeted actual
    cost data oth div
    assembly $330,000 $324,300
    machining 290,000 296,400
    packing 414,950 405,700
    other cost assoc with
    processing division manag 220,000 217,800
    128,000 133,060

    A. Prepare a responsibility report for the manager of the processing division.

    b. Prepare a responsibility report for the vice president of manufacturing.
    c. Explain where the $60000 unfavorable labor variance in paint department supervisor's report is included in the vice presidents report.

    d. Based on the responsibility report prepared in a, explain where the processing division manager should concentrate his attention.

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    Solution Summary

    The solution contains the preparation of responsibilty accounting report prepared for the manager of the processing division and for the vice-president.