The milton corporation has 4 divisions: the assembly, processing, machining, and packaging division. All 4 divisions are under control of the vice president of manufacturing. Each division has a manager and several departments that are directed by supervisors. The chain of command runs downward from vice president to division manager to supervisor. The processing division is composed of the paint and finishing departments. The May responsibility reports for the supervisors of these departments follow:
Data
budgeted actual variance
Paint dept
controllable cost
raw materials $25,900 $27,000 $1,100U
labor 57,700 64,000 6,300U
repairs 4,800 3,870 930U
maint 2,600 2,460 140F
total $91,000 $97,330 $6,330U
Finishing Dept
controllable cost
raw materials $22,810 $22,560 $250F
labor 43,300 39,900 3,400F
repairs 2,830 3,170 340U
maint 1,680 2,050 370U
total $70,620 $67,680 $2,940F
budgeted actual
cost data oth div
assembly $330,000 $324,300
machining 290,000 296,400
packing 414,950 405,700
other cost assoc with
processing division manag 220,000 217,800
128,000 133,060
1. Prepare a responsibility report for the manager of the processing division.
2. Prepare a responsibility report for the vice president of manufacturing.
3. Explain where the $60000 unfavorable labor variance in paint department supervisor's report is included in the vice presidents report.
4. Based on the responsibility report prepared in a, explain where the processing division manager should concentrate his attention.