Please help me answer this question Frank Weston, supervisor of the Freemont Cor

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Please help me answer this question

Frank Weston, supervisor of the Freemont Corporation's Machining Department, was visibly upset after being reprimanded for his department's poor performance over the prior month. The department's cost control report is given below. I just can't understand all these unfavorable variances.' Weston complained to the supervisor of another department. When the boss called me in. I thought he was going to give me a pat on the back because I know for a fact that my department worked more efficiently last month than it has ever worked before. Instead, he tore me apart. I thought for a minute that it might be over the supplies that were stolen out of our warehouse last month. But they only amounted to a couple of hundred dollars, and just ookatthis report. Everything is unfavorable.' Direct labor wages and supplies are variable costs: supervision and depreciation are fixed costs; and maintenance and utilities are mixed costs. The fixed component of the budgeted maintenance cost is $92.000: the fixed component of the budgeted utilities cost is $11,700. Required: Complete the performance report that will help Mr. Weston's superiors assess how well costs were controlled in the machining department. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.)

Explanation / Answer

Toque Cooking Academy Flexible Budget Performance Report For the Month Ended Oct 31 Actual Results Revenue & Spending Variances Flexible Budget Activity Variances Planning Budget Direct Labor Wages             86,100              1,300 F          87,400           6,900 U          80,500 Supplies             23,100                  300 U          22,800           1,800 U          21,000 Maintenance           137,300                  300 F       137,600           3,600 U       134,000 Utilities             15,700                  200 U          15,500               300 U          15,200 Supervision             38,000                     -            38,000                  -            38,000 Depreciation             80,000                     -            80,000                  -            80,000 Total expenses           380,200              1,100 F       381,300         12,600 U       368,700 Budgeted maint Cost = 134000 Variable Budgeted Maint. Cost = 134000 - 92000 = 42000 Variable Maint. Cost - Flexible Budget = 42000 / 35000 Hrs X 38000 Hrs = 45600 Total Maint Costs - Flexible = $45600 + $92000 = $137600 Budgeted Utilities Costs = 15200 Variable Budgeted Utilities. Cost = 15200 - 11700 = 3500 Variable Utilities - Flexible Budget = 3500 / 35000 Hrs X 38000 Hrs = 3800 Total Utilities Costs - Flexible = $11700 + $3800 = $15500

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