aconnect illie Whitehorse the plant manager of Travel Frees

aconnect illie Whitehorse, the plant manager of Travel Free\'s Indiana plant, is responsible for all of that plant\'s costs other than her own salary. The plant has two operating departments and one service department. The mper and trailer operating departments manufacture different products and have their own managers eoffice department, which Whitehorse also manages, provides services equally to the two operating Th departments. A budget is prepared for each operating department and the office department. The compa- ny\'s responsibility accounting system must assemble information to present budgeted and actual costs in performance reports for each operating department manager and the plant manager. Each pert report includes only those costs that a particular operating department manager can control: raw materials wages, supplies used, and equipment depreciation. The plant manager is responsible for the department managers\' salaries, utilities, building rent, office salaries other than her own, and other office costs plus all costs controlled by the two operating department managers. The annual departmental budgets and adc- ual costs for the two operating departments follow. ormance

Solution

Answer 1-a. Responsibility-Accounting Performance Report Manager, Camper Department For The Year Budgeted Amount Actual Amount Over (Under) Budget Controllable Costs Raw Materials        195,000.00        194,200.00         (800.00) Employee Wages        104,000.00        106,600.00        2,600.00 Supplies Used          33,000.00          31,700.00     (1,300.00) Depreciation Equipment          60,000.00          60,000.00                     -   Totals        392,000.00        392,500.00           500.00 Answer 1-b. Responsibility-Accounting Performance Report Manager, Trailer Department For The Year Budgeted Amount Actual Amount Over (Under) Budget Controllable Costs Raw Materials        275,000.00        273,200.00     (1,800.00) Employee Wages        205,000.00        206,400.00        1,400.00 Supplies Used          90,000.00          91,600.00        1,600.00 Depreciation Equipment        125,000.00        125,000.00                     -   Totals        695,000.00        696,200.00        1,200.00 Answer 1-c. Responsibility-Accounting Performance Report Manager, Indiana Plant For The Year Budgeted Amount Actual Amount Over (Under) Budget Controllable Costs Dept. Manager Salaries          95,000.00          97,500.00        2,500.00 Utilities            9,000.00            8,300.00         (700.00) Building Rent          15,000.00          14,000.00     (1,000.00) Other Office Salaries        137,500.00        135,100.00     (2,400.00) Other Office Costs          25,000.00          23,000.00     (2,000.00) Camper Department        392,000.00        392,500.00           500.00 Trailer Department        695,000.00        696,200.00        1,200.00 Totals    1,368,500.00    1,366,600.00     (1,900.00) Answer 2. As comparing operating department of trailers and camper the managers has not manage the cost better because in responsibility accounting performance of camper and trailers departmentshows over budget of $500 and $ 1,200 respectively which is not good for the department. But, plant manager has manage the cost better becausethe Responsibility Accounting Performance Report of overall Indaina plant has under budget of $1,900 which is good for the company which means he has good control over cost and expenses of overall plant. It will be beneficial to the company that plant manager decision must be implemented.