Partially completed budget performance reports for Maguire Company, a manufacturer of air conditioners,

Partially completed budget performance reports for Maguire Company, a manufacturer of air conditioners, are provided on the following page.


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.