2. Responsibility accounting for cost centers A cost center is responsible for c

Question

2. Responsibility accounting for cost centers

A cost center is responsible for controlling and reporting its costs. The manager of the cost center also has the authority to control the necessary costs. A budget performance report is an example of a report generated by a cost center.

The Cooper Company has two plants, known as West Plant and East Plant. Each plant has two departments, Processing Department and Finishing Department. Both departments are cost centers. The following budget performance reports have been prepared for the two departments at West Plant for the month of April.

Finishing Department

Budget Performance Report

Supervisor, Finishing Department-West Plant

For the Month Ending April 30,2013

Processing Department

Budget Performance Report

Supervisor, Finishing Department-West Plant

For the Month Ending April 30,2013

A. Please complete the following:

Using the information given, prepare a budget performance report for west Plant for the month of April.

Budget Performance Report

Manager, West Plant

For the Month Ending April 30,2013

Budget Actual Over Budget Under Budget Factory wages $ 250,130 $235,000 $0 $15,130 Utilities 50,260 49,325 0 935 Maintenance 82,390 80,630 0 01,760 Supervisory salaries 43,325 43,325 0 0 Materials 18,650 21,300 2,650 0 Depreciation of plant and equipment 27,600 27,600 0 0 $472,355 $457,180 $2,650 $17,825

Explanation / Answer

Budget Acual over Budget Under Budget Pocessing Department 151275 153955 3530 850 Finishing Department 472355 457180 2650 17825

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