Page 271 - DCOM302_MANAGEMENT_ACCOUNTING

Management Accounting

Notes Departmental Performance Report
S Company Performance Report
Dept. Prod. Dept. X Current Responsibility of
Month - January Year to date
Actual Planned Var. Amt. % Description Controllable Actual Variance
Planned Amount %
87,500 1,00,000 12,500* 13* Dept. output in units
Raw Material A:
1,76,000 1,75,000 1,000* 1* Units
`32,200 `35,000 `200* 1* Cost
Director Labour:
35,357 35,000 357* 1* Hours
`1.96 `2.00 `0.04 2 Avg. wage rate
`69,300 `70,000 `700 1 Cost
10,000 10,000 - - Salaries
3,740 3,800 60 2 Indirect materials
7,550 7,250 300 4* Indirect labour
560 1,000 440 44 Miscellaneous
21,850 22,050 200 1 Sub-Total
Service Usage:
530 480 5* 10* Kilowatt hours (000’s)
72 60 12* 20* Direct repair hours
1,26,350 1,27,050 700 1 Grand Total
Non-Controllable
2,000 2,000 - - Depreciation
500 500 - - Insurance
200 200 . . Taxes
2,700 2,700 - - Total non-controllable
* Unfavourable variances
Comments:
1. Output was 13 percent below the planned level due to production scheduling pull back
to accommodate 5000 units unfavourable sales volume variance, the department met its
production schedule as adjusted.
2. Unfavourable variances in service usage should be carefully investigated to determine
underlying causes.

To have the maximum benefit, the monthly report should be designed to indicate the performance
of each individual having supervisory responsibility. A well-designed control report should be
completely integrated i.e., each schedule should look on a responsibility basis so that (i) major
variation may be traced to the source of the problem and (ii) the various segments comprise within
themselves a complete report. Please refer to the illustration on previous page – Performance
Reports SP Manufacturing Company.

266 LOVELY PROFESSIONAL UNIVERSITY