Question

Walton Corporation has four divisions: the assembly division, the processing division, the machining division, and the packing division. All four divisions are under the 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: ********** Please provide detail explanation & step by step************

	Budgeted*				Actual				Variance
Paint Department
Controllable costs
Raw materials	$	60,000			$	62,800			$	2,800	U
Labor		59,500				67,600				8,100	U
Repairs		6,600				5,490				1,110	F
Maintenance		4,400				4,080				320	F
Total	$	130,500			$	139,970			$	9,470	U
Finishing Department
Controllable costs
Raw materials	$	48,000			$	45,200			$	2,800	F
Labor		46,900				41,700				5,200	F
Repairs		3,730				4,250				520	U
Maintenance		2,760				3,490				730	U
Total	$	101,390			$	94,640			$	6,750	F

*Walton uses flexible budgets for performance evaluation.

Other pertinent cost data for May follow.

	Budgeted*				Actual
Cost data of other divisions
Assembly	$	389,000			$	376,100
Machining		299,000				314,400
Packing		423,950				407,500
Other costs associated with
Processing division manager		223,600				221,100
Vice president of manufacturing		137,000				146,560

*Walton uses flexible budgets for performance evaluation.

Required

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

b.    Prepare a responsibility report for the vice president of manufacturing.

Required A

Prepare a responsibility report for the vice president of manufacturing. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance).)

	Responsibility Report Processing Division Manager For the Month Ended May 31 Controllable costs Budget Actual Variances Paint department U Finishing department F Other costs F Total U

Required B

Prepare a responsibility report for the vice president of manufacturing. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance).)

	Responsibility Report Vice President of Manufacturing For the Month Ended May 31 Controllable costs Budget Actual Variances Assembly division F Processing division U Machining division U Packing division F Other costs U Total F

Answer 1

Required A
Prepare a responsibility report for the vice president of manufacturing. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance).)
Responsibility Report
Processing Division Manager
For the Month Ended May 31
Controllable costs	Budget	Actual	Variances (difference)
Paint department	$130,500.00	$139,970.00	$9,470.00	U
Finishing department	$101,390.00	$94,640.00	$6,750.00	F
Other Costs	$223,600.00	$221,100.00	$2,500.00	F
Total	$455,490.00	$455,710.00	$220.00	U
Required B
Prepare a responsibility report for the vice president of manufacturing. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance).)
Responsibility Report
Vice President of Manufacturing
For the Month Ended May 31
Controllable costs	Budget	Actual	Variances (Difference)
Assembly division	$389,000.00	$376,100.00	$12,900.00	F
Processing division (calculated part a)	$455,490.00	$455,710.00	$220.00	U
Machining division	$299,000.00	$314,400.00	$15,400.00	U
Packing division	$423,950.00	$407,500.00	$16,450.00	F
Other costs	$137,000.00	$146,560.00	$9,560.00	U
Total	$1,704,440.00	$1,700,270.00	$4,170.00	F