Maguire Company
budget performance report—vice president, production
For the Month ended May 31, 2014
plant budget Actual Over budget Under budget
Mid-Atlantic Region $748,800 $747,000 $1,800
West Region 535,680 532,800 2,880
South Region (g) (h) (i)
(j) (k) $ (l) $4,680
Maguire Company
budget performance report—Manager, South region plant
For the Month ended May 31, 2014
Department budget Actual Over budget Under budget
Chip Fabrication (a) (b) (c)
Electronic Assembly $153,216 $155,232 $ 2,016
Final Assembly 246,600 245,952 $648
(d) (e) $ (f ) $648
Maguire Company
budget performance report—Supervisor, Chip Fabrication
For the Month ended May 31, 2014
Cost budget Actual Over budget Under budget
Factory wages $ 47,952 $ 49,200 $1,248
Materials 125,280 124,416 $864
Power and light 6,912 8,208 1,296
Maintenance 12,096 13,248 1,152
$192,240 $195,072 $3,696 $864
a. Complete the budget performance reports by determining the correct amounts for the lettered spaces.
b. Compose a memo to Holly Keller, vice president of production for Maguire Company, explaining the performance of the production division for May.
Answer:
a. (a) $192,240 (g) $592,056
(b) $195,072 (h) $596,256
(c) $2,832 (i) $4,200
(d) $592,056 (j) $1,876,536
(e) $596,256 (k) $1,876,056
(f) $4,848 (l) $4,200
Schedules of supporting calculations (answers in italics; the solution requires
working from the department level, up to the plant level, then to the vice president
of production level):
MAQUIRE COMPANY
Budget Performance Report—Vice President, Production
For the Month Ended May 31, 2014
Plant
Budget
Actual
Over
Budget
Under
Budget
Mid-Atlantic Region $ 748,800 $ 747,000 $1,800
West Region 535,680 532,800 2,880
South Region 592,056 (g) 596,256 (h) $4,200 (i)
$1,876,536 (j) $1,876,056 (k) $4,200 (l) $4,680
M
AQUIRE COMPANY
Budget Performance Report—Manager, South Region Plant
For the Month Ended May 31, 2014
Department
Budget
Actual
Over
Budget
Under
Budget
Chip Fabrication $192,240 (a) $195,072 (b) $2,832 (c)
Electronic Assembly 153,216 155,232 2,016
Final Assembly 246,600 245,952 $648
$592,056 (d) $596,256 (e) $4,848 (f) $648
MAQUIRE COMPANY
Budget Performance Report—Supervisor, Chip Fabrication
For the Month Ended May 31, 2014
Cost
Budget
Actual
Factory wages $ 47,952 $ 49,200 $1,248
Materials 125,280 124,416 $864
Power and light 6,912 8,208 1,296
Maintenance 12,096 13,248 1,152
$192,240 $195,072 $3,696 $864
b. MEMO
To: Holly Keller, Vice President of Production
The South Region plant has experienced a budget overrun, while the Mid-Atlantic and
West Region plants have experienced a budget surplus. The budget of the South
Region plant reveals that the Chip Fabrication Department causes the majority
of the budget overrun. The budget for the Chip Fabrication Department indicates
that the budget overrun was caused by a combination of budget overruns in
wages, power and light, and maintenance that exceeded a budget surplus in
materials. The supervisor of the Chip Fabrication Department should investigate
the reasons for the budget overruns in wages, power and light, and
maintenance. It is possible that all three of these budget overruns have the
same cause, such as a need for unplanned overtime or weekend work to meet
schedules.