Question

Several years ago, Westmont Corporation developed a comprehensive budgeting system for 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 report for the company's Assembly Department for the month of March follows:

Assembly Department Cost Report For the Month Ended March 31
	Actual Results		Planning Budget		Variances
Machine-hours		35,000		40,000
Variable costs:
Supplies	$	29,700	$	32,000	$	2,300	F
Scrap		19,500		20,000		500	F
Indirect materials		51,800		56,000		4,200	F
Fixed costs:
Wages and salaries		79,200		80,000		800	F
Equipment depreciation		60,000		60,000		–
Total cost	$	240,200	$	248,000	$	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 budget

Required:

Complete the new performance report for the quarter, based on Flexible Budget Performance approach.

Answer 1