Numerical Problems BN160722 BUS 530 Managerial Accounting Professor: Dr. Kaveh Shamsa Westcliff University 19/12/2016 Abstract This paper consists of solution of numerical problems 9-4A and 10-6A of our textbook. This paper will show how the responsibility accounting performance reports are prepared for Travel Fair. This paper will argue who can better manage the cost in the Travel Fair: Plant manager or Operating manager by comparing the budget cost and actual cost. This study is conducted to analyze the expenses of Home Décor Company. This study also shows the departmental income statement of Home Décor Company. This paper will be discussing whether the department 200 should be eliminated or not in Home Décor Company. Introduction Responsibility accounting performance report is a budget that compares actual and budgeted amounts of controllable expenses for its managers and department. Similarly, the responsibility accounting performance reports actual costs that a manager is responsible for and their budgeted amount. Problem 9.4 A Solution 1a: Responsibility Accounting Performance Report Manager of the Camper Department Controllable Cost Budget ($) Actual ($) Over …show more content…
This study shows that it is the plant manager that can manage the cost compare to operating manager. It is because the plant manager was able to spend less than the budget cost while the operating manger spend more than the budget cost. Thus, the manager of each department i.e. camper and trailer should take an immediate action to see why the cost was more than the budgeted amount. In problem 10-6A, the study shows that the department 200 should not be eliminated. It is because there is the net loss is 6200 in the departmental income statement while $134400 departmental contribution to overhead. Thus, it is better than the loss. As a result, Home Décor Company should not eliminate the department