BUS 630 Week 4 DQ 2 Critiquing a Cost Report

1
BUS 630 Week 4 DQ 2 Critiquing a Cost Report To
purchase this material link http//www.assignment
cloud.com/BUS-630/BUS-630-Week-4-DQ-2-Critiquing-a
-Cost-Report Complete the following exercise
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 the red
ink," 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 look at this 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. Freemont Corporation-Machining
Department  
2

• Cost Control Report  
• For the Month Ended June 30  
•   Planning Budget Actual Results Variances  
• Machine-hours 35,000 38,000    
•          
• Direct labor wages 80,500 86,100 5,600 U
• Supplies 21,000 23,100 2,100 U
• Maintenance 134,000 137,300 3,300 U
• Utilities 15,200 15,700 500 U
• Supervision 38,000 38,000    
• Depreciation 80,000 80,000    
• Total 368,700 380,200    
•  
• Evaluate the company's cost control report and
  explain why the variances were all unfavorable.
• Prepare a performance report that will help Mr.
  Weston's superiors assess how well costs were
  controlled in the Machining Department.
• Respond to at least two of your fellow students
  postings.
• For more courses visit our website