Billie 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 d camper and trailer operating departments manufacture different products and have their own managers. The office department, which Whitehorse also manages, provides services equally to the two operating departments. A budget is prepared for each operating department and the office department. The company\'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 performance 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 actual costs for the two operating departments follow. Budget Actual Raw materials Employee wages Dept. manager salary Supplies used Depreciation-Equip. Utilities Building rent Office department costs Campers $ 196,100 104,200 43,200 34,600 62,000 4,600 5,400 67,750 Trailers $ 277,000 205,400 52,400 91,800 126,000 5,400 9,400 67,750 Combined $ 473,100 309,600 95,600 126,400 188,000 10,000 14,800 135,500 Campers $ 194,700 107,200 44,700 32,900 62,400 3,900 5,400 81,550 Trailers $ 273,600 207,600 53,300 91,300 126,500 5,300 8,500 81,550 Combined $ 468,300 314,800 98,000 124,200 188.900 9,200 13,900 163,100 Totals $ 517,850 $835,150 $ 1,353,000 $532,750 $ 1,380,400 $847,650 -
Dept.manager, camper department
Controllable costs
Budgeted
Actual
(+Over) (-Under)
Raw materials
196,100
194,700
-1,400
Employee wages
104,200
107,200
+3,000
Supplies used
34,600
32,900
-1,700
Equipment depreciation
62,000
62,400
+400
Total
396,900
397,200
300
B) Responsibility accounting performance report
dept.manager, trailer department
Controllable costs
Budget
Actual
(+Over) (-Under)
Raw materials
277,000
273,600
-3,400
Employee wages
205,400
207,800
+2,200
Supplies used
91,800
91,300
-500
Equipment depreciation
126,000
126,500
+ 500
0
Total
700,200
699,000
-1200
C) Responsibility accounting performance report
Plant. Manager, Indiana department
Controllable cost
Budgeted
Actual
(+Over) (-Under)
Department manager salary
95,600
98,000
+2,400
Utilities
10,000
9,200
-800
Building rent
14,800
13,900
-900
Other office salaries
38,500
26,100
-11,400
Other office cost
11,000
45,000
+34,000
Camper department
3,96,900
3,97,200
+300
Trailer department
7,00,200
6,99,000
-1,200
Total
12,67,000
12,88,400
+21,400
| Controllable costs | Budgeted | Actual | (+Over) (-Under) |
| | | |
| Raw materials | 196,100 | 194,700 | -1,400 |
| Employee wages | 104,200 | 107,200 | +3,000 |
| Supplies used | 34,600 | 32,900 | -1,700 |
| Equipment depreciation | 62,000 | 62,400 | +400 |
| | | |
| Total | 396,900 | 397,200 | 300 |
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