The Following Overhead Data Are for a Department in a Large

question 76

Essay

The following overhead data are for a department in a large company.
$\begin{array}{|l|r|r|} \hline& \text { Activity Costs Incurred } & \text { Static Budget } \\\hline \text { Activity Level (in units) } & 480 & 480 \\\hline \text { Variable costs: } & & \\\hline \text { Supplies } & \$ 16,734 & \$ 16,944 \\\hline \text { Electricity } & \$ 1,02 & \$ 1,056 \\\hline \text { Fixed costs: } & & \\\hline \text { Supervision } & \$ 8,570 & \$ 8,600 \\\hline \text { Depreciation } & \$ 5,780 & \$ 5,800\\\hline\end{array}$ Required:
Prepare a report that would be useful in assessing how well costs were controlled in this department.

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Definitions:

Deposit Method

An accounting method used when revenue cannot be recognized because the fundamental earnings process is not considered complete.

Cost Recovery Method

An accounting method where revenues are not recognized until all costs have been recovered.

Real Estate Sales

Transactions involving the transfer of ownership rights in property or land from one party to another, typically facilitated by agents or brokers.

Contra-Asset Account

A contra-asset account is an account used in a ledger to reduce the value of a related account. It has a credit balance and is used to adjust the value of an asset account to its net value.