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Problem 22-1A Responsibility accounting performance reports; controllable and budgeted costs LO P1 Billie Whitehorse, the plant...

Problem 22-1A Responsibility accounting performance reports; controllable and budgeted costs LO P1

Billie Whitehorse, the plant manager of Travel Free’s Indiana plant, is responsible for all of that plant’s costs other than her own salary. The plant has two operating departments and one service department. The camper and trailer operating departments manufacture different products and have their own managers. The office department, which Whitehorse also manages, provides services equally to the two operating departments. A budget is prepared for each operating department and the office department. The company’s responsibility accounting system must assemble information to present budgeted and actual costs in performance reports for each operating department manager and the plant manager. Each performance report includes only those costs that a particular operating department manager can control: raw materials, wages, supplies used, and equipment depreciation. The plant manager is responsible for the department managers’ salaries, utilities, building rent, office salaries other than her own, and other office costs plus all costs controlled by the two operating department managers. The annual departmental budgets and actual costs for the two operating departments follow.

Budget Actual
Campers Trailers Combined Campers Trailers Combined
Raw materials $ 195,600 $ 277,400 $ 473,000 $ 194,200 $ 273,200 $ 467,400
Employee wages 105,700 205,200 310,900 107,400 206,600 314,000
Dept. manager salary 43,900 52,900 96,800 44,600 53,100 97,700
Supplies used 33,800 91,600 125,400 32,000 91,000 123,000
Depreciation—Equip. 61,000 127,000 188,000 62,400 126,500 188,900
Utilities 4,000 6,200 10,200 4,200 6,200 10,400
Building rent 6,000 10,100 16,100 5,600 8,600 14,200
Office department costs 67,750 67,750 135,500 68,550 68,550 137,100
Totals $ 517,750 $ 838,150 $ 1,355,900 $ 518,950 $ 833,750 $ 1,352,700


The office department’s annual budget and its actual costs follow.

Budget Actual
Plant manager salary $ 87,000 $ 89,000
Other office salaries 42,500 25,900
Other office costs 6,000 22,200
Totals $ 135,500 $ 137,100


Required:

1. Prepare responsibility accounting performance reports that list costs controlled by the following. In each report, include the budgeted and actual costs and show the amount that each actual cost is over or under the budgeted amount.
a. Manager of the camper department.
b. Manager of the trailer department.
c. Manager of the Indiana plant.

Prepare responsibility accounting performance reports that list costs controlled by the following. In each report, include the budgeted and actual costs and show the amount that each actual cost is over or under the budgeted amount for manager of the camper department. (Under budget amounts should be indicated by a minus sign.)

Responsibility Accounting Performance Report
Dept. Manager, Camper Department
For the Year
Budgeted Amount Actual Amount Over (Under) Budget
Controllable Costs
Totals

Prepare responsibility accounting performance reports that list costs controlled by the following. In each report, include the budgeted and actual costs and show the amount that each actual cost is over or under the budgeted amount for manager of the trailer department. (Under budget amounts should be indicated by a minus sign.)

Responsibility Accounting Performance Report
Dept. Manager, Trailer Department
For the Year
Budgeted Amount Actual Amount Over (Under) Budget
Controllable Costs
Totals

Prepare responsibility accounting performance reports that list costs controlled by the following. In each report, include the budgeted and actual costs and show the amount that each actual cost is over or under the budgeted amount for manager of the Indiana plant. (Under budget amounts should be indicated by a minus sign.)

Responsibility Accounting Performance Report
Plant Manager, Indiana Plant
For the Year
Budgeted Amount Actual Amount Over (Under) Budget
Controllable Costs
Totals

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