Question
In: Accounting
One subunit of All Season Sports Manufacturing Company had the following financial results last month: All...
One subunit of All Season Sports Manufacturing Company had the following financial results last month:
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All Season Sports Manufacturing Company—Camping and Hiking Subunit |
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Monthly Performance Report |
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For the Month |
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Variance |
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Product |
Actual |
Budgeted |
Variance * |
Percentage * |
||
|
Direct materials |
$16,095 |
$15,000 |
||||
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Direct labor |
15,240 |
16,000 |
||||
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Indirect labor |
29,200 |
25,000 |
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Utilities |
16,395 |
15,000 |
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Depreciation |
24,000 |
24,000 |
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Repairs and maintenance |
6,285 |
7,500 |
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Total |
$107,215 |
$102,500 |
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*Be sure to indicate whether each variance is favorable (F) or unfavorable (U). |
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Requirements 1. Complete the performance evaluation report for this subunit.
2. Based on the data presented, what type of responsibility center is the subunit?
3. Which items should be investigated if part of management's decision criteria is to investigate all variances exceeding $ 2600 or 10.5 %?
4. Should only unfavorable variances be investigated? Explain.
Requirement 1. Complete the performance evaluation report for this subunit. (Enter the variances as positive numbers. Round the variance percentages to the nearest hundredth percent, X.XX%. Label each variance as favorable (F) or unfavorable (U). If the variance is 0, make sure to enter in a "0". A variance of zero is considered favorable.)
Solutions
Expert Solution
Above question deals with performance evaluation of Responsibility centre, Responsibility centre is part of subunit of company in which manager is reposonsible for its performance and efficency. Cost centre, profit centre and Investment centre are examples of Responsibility centre.
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