One subunit of Bacall Sports Manufacturing Company had the following financial results last month: A B C D E 1 Bacall Sports Manufacturing Company—Water Sports Subunit 2 Monthly Performance Report 3 For the Month 4 Actual Budgeted Variance * Variance Percentage * 5 Direct materials $16,095 $15,000 6 Direct labor 15,240 16,000 7 Indirect labor 29,200 25,000 8 Utilities 16,395 15,000 9 Depreciation 24,000 24,000 10 Repairs and maintenance 6,285 7,500 11 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 the management's decision criteria is to investigate all variances exceeding $2,500 or 12.5%? 4. Should only unfavorable variances be investigated? Explain.
One subunit of Bacall Sports Manufacturing Company had the following financial results last month: A B C D E 1 Bacall Sports Manufacturing Company—Water Sports Subunit 2 Monthly Performance Report 3 For the Month 4 Actual Budgeted Variance * Variance Percentage * 5 Direct materials $16,095 $15,000 6 Direct labor 15,240 16,000 7 Indirect labor 29,200 25,000 8 Utilities 16,395 15,000 9 Depreciation 24,000 24,000 10 Repairs and maintenance 6,285 7,500 11 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 the management's decision criteria is to investigate all variances exceeding $2,500 or 12.5%? 4. Should only unfavorable variances be investigated? Explain.
Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter13: Emerging Topics In Managerial Accounting
Section: Chapter Questions
Problem 28BEB: Quality Cost Report Loring Company had total sales of 2,400,000 for fiscal 20X1. The costs of...
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Question
One subunit of Bacall Sports Manufacturing Company had the following financial results last month:
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A
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B
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C
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D
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E
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1
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Bacall Sports Manufacturing Company—Water Sports Subunit
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||||
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2
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Monthly Performance Report
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||||
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3
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For the Month
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||||
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4
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Actual
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Budgeted
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Variance *
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Variance Percentage *
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|---|---|---|---|---|---|
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5
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Direct materials
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$16,095
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$15,000
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6
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Direct labor
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15,240
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16,000
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7
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Indirect labor
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29,200
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25,000
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8
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Utilities
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16,395
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15,000
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9
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Depreciation
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24,000
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24,000
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10
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Repairs and maintenance
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6,285
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7,500
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11
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Total
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$107,215
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$102,500
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*Be sure to indicate whether each variance is favorable (F) or unfavorable (U).
Requirements:
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1.
|
Complete the performance evaluation report for this subunit.
|
|
2.
|
Based on the data presented, what type of responsibility center is the subunit?
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|
3.
|
Which items should be investigated if part of the management's decision criteria is to investigate all variances exceeding $2,500 or 12.5%? |
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4.
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Should only unfavorable variances be investigated? Explain.
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