question archive The Eastern District Blankfine Products, Inc
The Eastern District Blankfine Products, Inc
Subject:AccountingPrice:2.89 Bought3
The Eastern District Blankfine Products, Inc., is organized as a cost center. The budget for the Eastern District of Blankfine Products, Inc, for the month ended October 31, 2012, is as follows:
Sales salaries ........... $ 683,200
System administration salaries ..... 373,460
Customer service salaries ........ 127,200
Billing salaries ........... 82,300
Maintenance ............. 226,170
Depreciation of Plant and equipment .... 76,860
Insurance and property taxes ....... 34,400
Total ............... $1,603,590
During October, the costs incurred in the Eastern District were as follows:
Sales salaries ........... $ 682,400
System administration salaries ..... 373,100
Customer service salaries ........ 150,100
Billing salaries ........... 81,750
Maintenance ............. 227,500
Depreciation of Plant and equipment .... 76,860
Insurance and property taxes ....... 34,500
Total ............... $1,626,210
Instructions
1. Prepare a budget performance report for the manager of the Eastern District of Blankfine Products for the month of October.
2. For which costs might the supervisor be expected to request supplemental reports?
Purchase A New Answer
Custom new solution created by our subject matter experts
GET A QUOTE
Answer Preview
1.
BLANKFINE PRODUCTS, INC.
Budget Performance Report x Manager, Eastern District
For the Month Ended October 31, 2012
Over Under
Budget Actual Budget Budget
Sales salaries.................................................. $ 683,200 $ 682,400 $ x $ 800
System administration salaries....................... 373,460 373,100 x 360
Customer service salaries............................... 127,200 150,100 22,900 x
Billing salaries................................................ 82,300 81,750 x 550
Maintenance................................................... 226,170 227,500 1,330 x
Depreciation of plant and equipment 76,860 76,860 x x
Insurance and property taxes......................... 34,400 34,500 100 x
Total......................................................... $1,603,590 $1,626,210 $24,330 $1,710
2.
The customer service salaries exceed the budget by over 18% of budget ($22,900/$127,200). The manager should request additional detailed information about the customer service department. There are several possible reasons for the budget variance. The manager should determine if the cause is related to an increase in salaries or an increase in people. If the latter, the manager may wish to determine if there has been an increase in customer service problems, hence a need to hire additional people. Such information could be used by the manager to solve customer service complaints and to reduce the number of future complaints.
