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Gore Company 2014

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Gore Company uses a responsibility reporting system. It has divisions in San
Francisco, Phoenix, and Tulsa. Each division has three production departments: Cutting,
Shaping, and Finishing. The responsibility for each department rests with a manager who
reports to the division production manager. Each division manager reports to the vice
president of production. There are also vice presidents for marketing and finance. All vice
presidents report to the president.

In January 2014, controllable actual and budget manufacturing overhead cost data
for the departments and divisions were as shown

Additional overhead costs were incurred as follows: Phoenix division production manager—
actual costs $73,100, budget $70,000; vice president of production—actual costs $72,000,
budget $70,000; president—actual costs $94,200, budget $91,300. These expenses are not

Vice President   Actual    Budget  
Marketing   167,200  160,000
Finance   125,000  120,000

The vice presidents, who report to the president (other than the vice president of production),
had the following expenses.

a) Complete the following responsibility reports
(1) Manufacturing overhead—Cutting Department manager—Phoenix division.
(2) Manufacturing overhead—Phoenix division manager.
(3) Manufacturing overhead—vice president of production.
(4) Manufacturing overhead and expenses—president.
b) Rank the comparative performances of:
(1) Department managers in the Phoenix division.
(2) Division managers.
(3) Vice presidents.

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