Question

Budget Performance Reports for Cost Centers

Partially completed budget performance reports for Delmar Company, a manufacturer of light duty motors, follow:

Delmar Company Budget Performance Report—Vice President, Production For the Month Ended June 30
Plant	Actual		Budget		Over Budget		(Under) Budget
Eastern Region	$474,000		$474,000				$0
Central Region	337,900		341,300				(3,400)
Western Region	(g)		(h)		(i)
	$(j)		$(k)		$(l)		$(3,400)

Delmar Company Budget Performance Report—Manager, Western Region Plant For the Month Ended June 30
Department	Actual		Budget		Over Budget		(Under) Budget
Chip Fabrication	$(a)		$(b)		$(c)
Electronic Assembly	76,030		75,050		980
Final Assembly	118,380		119,330				$(950)
	$(d)		$(e)		$(f)		$(950)

Delmar Company Budget Performance Report—Supervisor, Chip Fabrication For the Month Ended June 30
Cost	Actual		Budget		Over Budget		(Under) Budget
Factory wages	$27,910		$26,080		$1,830
Materials	70,010		70,500				$(490)
Power and light	4,830		4,060		770
Maintenance	7,520		6,870		650
	$110,270		$107,510		$3,250		$(490)

a. Complete the budget performance reports by determining the correct amounts for the lettered spaces (a-l) as marked above.

a. $	g. $
b. $	h. $
c. $	i. $
d. $	j. $
e. $	k. $
f. $	l. $

b. Complete the following memo to Randi Wilkes, vice president of production for Delmar Company, explaining the performance of the production division for June.

MEMO
To: Randi Wilkes, Vice President of Production

The _______ plant has experienced a budget overrun. Its budget reveals that the __________ Department caused the majority of the budget overrun. The supervisor of the _________ Department should investigate the reasons for the budget overruns in ________

Options for the blanks:

• factory wages, materials, and maintenance
• materials, power and light, and maintenance
• factory wages, power and light, and maintenance

Answer 1

Delmar Company Budget Performance Report—Vice President, Production For the Month Ended June 30
Plant	Actual	Budget	Over Budget	(Under) Budget
Eastern Region	$474,000	$474,000		$0
Central Region	337,900	341,300		(3,400)
Western Region	(g)304680	(h)301890	(i)2790
	$(j)1116580	$(k)1117190	$(l)2790	$(3,400)

.

Delmar Company Budget Performance Report—Manager, Western Region Plant For the Month Ended June 30
Department	Actual	Budget	Over Budget	(Under) Budget
Chip Fabrication	$(a)110270	$(b)107510	$(c)2760
Electronic Assembly	76,030	75,050	980
Final Assembly	118,380	119,330		$(950)
	$(d)304680	$(e)301890	$(f)3740	$(950)

.

Delmar Company Budget Performance Report—Supervisor, Chip Fabrication For the Month Ended June 30
Cost	Actual	Budget	Over Budget	(Under) Budget
Factory wages	$27,910	$26,080	$1,830
Materials	70,010	70,500		$(490)
Power and light	4,830	4,060	770
Maintenance	7,520	6,870	650
	$110,270	$107,510	$3,250	$(490)

.

a. Complete the budget performance reports by determining the correct amounts for the lettered spaces (a-l) as marked above.

a. $110270	g. $304680
b. $107510	h. $301890
c. $2760 (over budget)	i. $2790
d. $304680	j. $1116580
e. $301890	k. $1117190
f. $3740	l. $2790

.

Working:-

(a) -Total actual incurred cost in Chip fabrication department = $110270

(b) Total Budget cost in Chip fabrication department = $107510

(c) - here actually incurred is higher than Budgeted, so Over budget 110270 -107510 = 2760

(d) Sum of total actual cost in Western Region Plant =

Actual

$(a)110270

76,030

118,380

$(d)304680

.

(e) Sum of total Budgeted cost in Region Plant = 104030 + 67510 + 105110 = $276650

Budget

$(b)107510

75,050

119,330

$(e)301890

.

(f) Total over budget column = $2760+ $980 = $3740

.

(g) - Total actually cost in Western Region Plant = $304680

(h) - Total Budget cost in Western Region Plant = $301890

(i) - here actually incurred cost is over than Budgeted, so Over budget = 304680 - 301890= $2790

(j) Sum of total Actual cost for Production =

Actual

$474,000

337,900

(g)304680

$(j)1116580

(k) Sum of total Actually incurred cost in Region Plant = 530,900 + 378,400 + 276650 = $1185950

Budget

$474,000

341,300

(h)301890

$(k)1117190

(l) Total over budget column = $2790

.

b. Complete the following memo to Randi Wilkes, vice president of production for Delmar Company, explaining the performance of the production division for June.

MEMO
To: Randi Wilkes, Vice President of Production

The Western region plant has experienced a budget overrun. Its budget reveals that the chip fabrication  Department caused the majority of the budget overrun. The supervisor of the chip fabrication Department should investigate the reasons for the budget overruns in factory wages, power and light, and maintenance

.