Different Management Levels in Bates,Inc Required:
A

question 15

Essay

Different management levels in Bates,Inc.,require varying degrees of managerial accounting information.Because of the need to comply with the managers' requests,four different variances for manufacturing overhead are computed each month.The information for the September overhead expenditures is as follows:
$\begin{array}{lr}\text { Bud geted output units } & 3,200 \text { units } \\\text { Bud geted fixed manufacturing overhead } & \$ 20,000\\\text { Bud geted variable manufacturing overhead } & \$ 5 \text { per direct labor hour } \\\text { Bud geted direct manufacturing labor hours } & 2 \text { hours per unit }\\\text { Fixed manufacturing costs incurred } & \$ 26,000 \\\text { Direct manufacturing labor hours used } & 7,200 \\\text { Variable manufacturing costs incurred } & \$ 35,600 \\\text { Actual units manufactured } & 3,400\end{array}$ Required:
a.Compute a 4-variance analysis for the plant controller.
b.Compute a 3-variance analysis for the plant manager.
c.Compute a 2-variance analysis for the corporate controller.
d.Compute the flexible-budget variance for the manufacturing vice president.

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Definitions:

Intercompany Profits

Earnings generated from transactions between divisions or subsidiaries within the same corporation, which may be eliminated in consolidated financial statements.

Inventory

The items a business holds for the main purpose of resale or the raw materials used to produce goods for sale.

Management Fees

Fees charged by managers for the operation, management, or administration of a property, fund, or project.

Consolidated Financial Statements

Consolidated financial statements present the financial position and results of operations for a parent company and its subsidiaries as if they were a single economic entity.