Several years ago, Westmont Corporation developed a comprehensive budgeting system for planning and control purposes. While departmental supervisors have been happy with the system, the factory manager has expressed considerable dissatisfaction with the information being generated by the system.

A typical departmental cost report for a recent period follows:

Assembly Department Cost Report For the Month Ended March 31 Actual Results Planning Budget Variances
Machine-hours 25,000 30,000
Variable costs:
Supplies $6,000 $6,600 $600 F
Scrap 16,800 18,000 1,200 F
Indirect materials 54,200 61,500 7,300 F
Fixed costs:
Wages and salaries 64,300 62,000 2,300 U
Equipment depreciation 92,000 92,000

Required:

a. The company's president is uneasy about the cost reports, what can be the reason? (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer.)
b. What kind of reports should be used to give better insight into how well departmental supervisors are controlling costs?
c. Complete the new performance report for the quarter, based on Flexible Budget Performance approach. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i. e., zero variance). Input all amounts as positive values.