llie 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 department. The 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

Campers Trailers Combined Campers Trailers Combined
Raw materials $ 195,200 $ 276,400 $ 471,600 $ 194,600 $ 274,400 $ 469,000
Employee wages 105,400 205,400 310,800 107,400 207,000 314,400
Dept. manager salary 43,900 52,000 95,900 44,300 53,200 97,500
Supplies used 33,800 91,000 124,800 31,400 91,300 122,700
Depreciation—Equip. 61,000 126,500 187,500 60,600 126,500 187,100
Utilities 4,400 5,400 9,800 3,600 5,900 9,500
Building rent 5,400 9,000 14,400 5,900 9,200 15,100
Office department costs 68,750 68,750 137,500 70,550 70,550 141,100

Totals $ 517,850 $ 834,450 $ 1,352,300 $ 518,350 $ 838,050 $ 1,356,400

The office department’s annual budget and its actual costs follow.
Budget Actual
Plant manager salary $ 82,000 $ 84,000
Other office salaries 32,500 26,500
Other office costs 23,000 30,600

Totals $ 137,500 $ 141,100

Prepare responsibility accounting performance reports that list costs controlled by the following. In each report, include the budgeted and actual costs and show the amount that each actual cost is over or under the budgeted amount

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Posted on May 27, 2016Author TutorCategories Question, Questions