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:

All Season Sports Manufacturing Company—Camping and Hiking Subunit

Monthly Performance Report

For the Month

Variance

Product

Actual

Budgeted

Variance *

Percentage *

Direct materials

$16,095

$15,000

Direct labor

15,240

16,000

Indirect labor

29,200

25,000

Utilities

16,395

15,000

Depreciation

24,000

24,000

Repairs and maintenance

6,285

7,500

Total

$107,215

$102,500

*Be sure to indicate whether each variance is favorable (F) or unfavorable (U).

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.

ekkarill92 answered 1 year ago
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