Reference no: EM13576209

Several years ago, Westmont Corporation developed a comprehensive budgeting system for profit planning and control purposes. While departmental supervisors have been happy with the system, the factory manager has expressed considerable dissatisfaction with the information being generated by the system.
A typical departmental cost report for a recent period follows:

• Assembly Department
• Cost Report
• For the Month Ended March 31
• Planning
• Budget Actual
• Results Variances
• Machine-hours 58,000 16,900
• Variable costs:
• Supplies $58,000 $28,400 $29,600 F
• Scrap 34,800 12,140 22,660 F
• Indirect mat: 81,200 50,600 30,600 F
• Fixed costs:
• Wages and salaries 94,000 78,700 15,300 F
• Equipment depreciation 60,000 60,000

After receiving a copy of this cost report, the supervisor of the Assembly Department stated, "These reports are super. It makes me feel really good to see how well things are going in my department. I can't understand why those people upstairs complain so much about the reports."

For the last several years, the company's marketing department has chronically failed to meet the sales goals expressed in the company's monthly budgets.

Required:

Using a flexible budget approach to evaluate cost control, prepare a new performance report for the quarter.

• Assembly Department
• Flexible Budget Performance Report
• For the Month Ended March 31
• Activity Variances Spending Variances
• Supplies $ $
• Scrap $ $
• Indirect materials $ $
• Wages and salaries $0 $15300 F
• Equipment depreciation $ $