The Budget for Department 6 of Cardinal Company for the Current

question 65

Essay

The budget for Department 6 of Cardinal Company for the current month ending March 31 is as follows: During March, the costs incurred in Department 6 of Cardinal Company were materials, $204,000; factory wages, $285,000; supervisory salaries, $63,600; depreciation of plant and equipment, $35,000; power and light, $21,360; insurance and property taxes, $14,400; and maintenance, $9,456.
a.Prepare a budget performance report for the supervisor of Department 6 of Cardinal Company for the month of March.
b.Are there any significant variances (5% or greater) of the budgeted amounts that should be examined by the supervisor?

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Definitions:

Human Capital

The stock of skills, knowledge, and social and personality attributes, including creativity, embodied in the ability to perform labor so as to produce economic value.

Compensating Differential

A difference in wages that arises to compensate employees for unpleasant aspects of a job, such as risk of injury or inconvenient work hours.

Eye Surgeon

A medical doctor specializing in the diagnosis and surgical treatment of disorders and diseases of the eye.

International Trade

The exchange of goods and services between countries, across their international borders.