Manufacturing Overhead Actual Budget $73,000 $69,700 48,100 46,000 21,000 17,600
ID: 2530385 • Letter: M
Question
Manufacturing Overhead
Actual
Budget
$73,000
$69,700
48,100
46,000
21,000
17,600
20,100
16,500
22,200
19,500
$184,400
$169,300
Vice President
Actual
Budget
(a1)
To Cutting Department Manager—Seattle Division
Month: January
Controllable Costs:
Budget
Actual
Favorable
Unfavorable
Neither Favorable
nor Unfavorable
Total
LINK TO TEXT
(a2)
To Division Production Manager—Seattle
Month: January
Controllable Costs:
Budget
Actual
Favorable
Unfavorable
Neither Favorable
nor Unfavorable
Total
Durham Company uses a responsibility reporting system. It has divisions in Denver, Seattle, and San Diego. Each division has three production departments: Cutting, Shaping, and Finishing. The responsibility for each department rests with a manager who reports to the division production manager. Each division manager reports to the vice president of production. There are also vice presidents for marketing and finance. All vice presidents report to the president.In January 2017, controllable actual and budget manufacturing overhead cost data for the departments and divisions were as shown below.
Manufacturing Overhead
Actual
Budget
Individual costs—Cutting Department—Seattle Indirect labor$73,000
$69,700
Indirect materials48,100
46,000
Maintenance21,000
17,600
Utilities20,100
16,500
Supervision22,200
19,500
$184,400
$169,300
Total costs Shaping Department—Seattle $158,400 $148,400 Finishing Department—Seattle 210,500 204,100 Denver division 677,900 673,400 San Diego division 722,500 715,400Additional overhead costs were incurred as follows: Seattle division production manager—actual costs $52,200, budget $50,800; vice president of production—actual costs $65,500, budget $64,100; president—actual costs $76,300, budget $73,900. These expenses are not allocated.
The vice presidents who report to the president, other than the vice president of production, had the following expenses.
Vice President
Actual
Budget
Marketing $134,100 $129,500 Finance 108,600 104,600Explanation / Answer
Durham Company Responsibility report For the period ended Jan 2017 To Cutting Department Manager Budget Actual Difference Favorable / Unfavorable Indirect Labor 69700 73000 3300 Unfavorable Indirest materials 46000 48100 2100 Unfavorable Maintenance 17600 21000 3400 Unfavorable Utilities 16500 20100 3600 Unfavorable Supervision 19500 22200 2700 Unfavorable Total 169300 184400 15100 Unfavorable To Seattle Division Manager Budget Actual Difference Favorable / Unfavorable Cutting Department Costs 169300 184400 15100 Unfavorable Shaping Department Costs 148400 158400 10000 Unfavorable Finishing Department Costs 204100 210500 6400 Unfavorable Additional Overheads 50800 52200 1400 Unfavorable Total 572600 605500 32900 Unfavorable
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