The personnel department of Macy's clothing division had the following budget for the current year 2014 (12 months period):
$
Salaries and wages 242,550
Office stationery 5,439
Telephone 10,080
Electricity 11,751
Office rent 27,000
Depreciation 9,150
305,970
Assume the budget for December for the personnel department was 9% of the year's total budget for salaries; 7.5% for stationery, telephone and electricity; and one-twelfth for office rent and depreciation. Actual results for December were:
$
Salaries and wages 22,650
Stationery 384
Telephone 717
Electricity 854
Office rent 2,325
Depreciation 762
27,692
Required:
Problem a) Prepare a performance report for December. Calculations may be made to the nearest dollar (Use Microsoft Excel for calculations)
Problem b) Primal Holdings policy is to investigate all variances that deviate by plus or minus 5% from budget. Identify items to be investigated.
Problem c) Imagine you are the Manager of the Personnel department, present a Performance report to the senior management commenting on the reasons for these variances and recommend the possible corrective actions to be taken.