Charles Corporation has three divisions -marketing, production, and personnel. There is a manager in charge of each division. The flexible budgets for each division follow.
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Marketing
|
Production
|
Personnel
|
|
Manager
|
Manager
|
Manager
|
|
Controllable costs:
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|
|
|
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Direct material
|
|
$10,000
|
|
|
Direct labor
|
|
25,000
|
|
|
Salaries
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$40,000
|
|
$35,000
|
|
Supplies
|
10,000
|
3,000
|
2,000
|
|
Maintenance
|
1,000
|
2,000
|
1,000
|
|
Total
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$5 1,000
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$40,000
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$38,000
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Actual costs by division were:
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Controllable costs:
|
|
|
|
|
Direct material
|
|
$12,000
|
|
|
Direct labor
|
|
24,000
|
|
|
Salaries
|
$5 1,000
|
|
$34,000
|
|
Supplies
|
800
|
2,000
|
1,500
|
|
200
|
1,500
|
500
|
|
Total
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$52,000
|
$39,500
|
$36,000
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1. Prepare and evaluate a performance report for the production manager.
2. Prepare and evaluate a performance report for the vice president. Other costs for the vice president are assumed to be: budgeted $35,000 and actual $34,400.