Problem: Beverage Products, LLC, manufactures metal beverage containers. The division that manufactures soft-drink beverage cans for the North American market has two plants that operate 24 hours a day, 365 days a year. The plants are evaluated as cost centers. Small tools and supplies are considered variable overhead. Depreciation and rent are considered fixed overhead. The master budget for a plant and the operating results of the two North American plants, East Coast and West Coast, are as follows:
Master Budget East Coast West Coast
Center costs
Rolled aluminum ($0.01) $4,000,000 $3,492,000 $5,040,000
Lids ($0.005) $2,000,000 $1,980,000 $2,016,000
Direct Labor ($0.0025) $1,000,000 $864,000 $1,260,000
Small tools and supplies($0.0013) $520,000 $432,000 $588,000
Depreciation and rent $480,000 $480,000 $480,000
Total cost $8,000,000 $7,248,000 $9,384,000
Performance measures:
Cans processed per hour 45,662 41,096 47,945
Average daily pounds of scrap metal 5 6 7
Cans processed (in millions) 400 360 420
Q1. Prepare a performance report for the East Coast plant. Include a flexible budget and variance analysis. Enter F for favorable variance, and U for unfavorable variance. If an amount is zero, enter "0".
Q2. Prepare a performance report for the West Coast plant. Include a flexible budget and variance analysis. Enter F for favorable variance and U for unfavorable variance. If an amount is zero, enter "0".