BUSN6070 Waltham Motors Assignment

Question # 00613492
Subject: Education
Due on: 06/29/2020
Posted On: 06/29/2020 04:01 AM
Tutorials: 1
Rating:
4.9/5
Question Dot Image

ASSIGNMENT:

Prepare a business case analysis for Waltham Motors including detailed answers to the following questions:

1.     List some facts that recently have occurred at Waltham Motors.

2.     Analyze the report that was presented by the accountant. Do you agree with his conclusions and recommendations?

3.     How can the cost control process be improved?

4.     Prepare a flexible budget, estimate the line by line variances and submit in excel. How does this result compare with the report presented in question #2?

5.     Prepare a comprehensive variance analysis, i.e. computing the price variances and quantity variances.

6.     How do you dispose of the variances for the variable and fixed costs on the books of the company?

7.     How is the report from question 5 useful to improve the cost control systems of the firm?

(CASE IS ON THE FOLLOWING 3 PAGES.)

WALTHAM MOTORS DIVISION

            When Sharon Michaels arrived at her office at Waltham Motors Division on June 4, 2004, she was pleased to find the monthly performance report for May on her desk.  Her job as division controller was to analyze results of operations each month and to prepare a narrative report on operations that was to be forwarded to the corporate headquarters of Marco Corporation.  Waltham Motors was a wholly owned subsidiary of Marco.  The atmosphere at the division had been one of apprehensiveness throughout the month of May, and today would provide a chance to find out how well division management had compensated for the recent loss of a major customer contract.

The Current Situation

            Waltham Motors manufactured electric motors of a single design that were sold to household appliance manufacturers.  Originally a family-owned business, the division had been acquired in late 2003 by the Marco Corporation.  Few changes had been made in either the company’s operating procedures or systems because Marco’s management had chosen to delay changing procedures and systems until it was able to observe how well those already in use at Waltham functioned.  In April, Sharon Michaels, who had earned a master’s degree in business administration in 2002, was transferred from the corporate headquarters controller’s office to Waltham Motors.  She was joined in late May by David Marshall, also from Marco, who was to be the new division manager.

            Because of the lost contract, Michaels had asked the plant accountant to assemble the May figures as quickly as possible, but she was amazed that they were ready so soon.  At headquarters, monthly results had rarely been available until several days after the end of each month.  Even though the plant accountant had promised Sharon that he would be able to prepare the report in a single day with some overtime work, she was surprised that he had been able to do so.

            The division had prepared a budget for 2004 based on estimated sales and production costs.  Because sales were not subject to seasonal fluctuations, the monthly budget was merely one-twelfth of the annual budget.  No adjustments had been made to the May budget when the contract was lost in April.

The Performance Report

            A glance at the performance report confirmed Michaels’s worst fears.  Instead of a budgeted profit of $91,200, the report showed the division had lost $7,200 in May.  Even allowing for the lost volume, she had expected a better showing than indicated by the performance report.  The plant accountant had attached the following memo to the report:        June 3, 11:00 P.M.

Sharon:

As promised, here is the performance report for May. (I told you smaller is better; we’ll show headquarters how efficient our plant accounting department is!)  I am sure you’ll find the bottom line as disappointing as I did, but plant performance really looks good, and the crews there may deserve our compliments.  Note how they are at or under budget on every single cost except for supervision.  I suspect that the unfavorable variance in supervision was caused directly by the work involved in controlling other costs.

            Because I worked late, I am taking a day off tomorrow.  The other data you requested are as follows:

1.      There were no beginning and ending inventories in work in progress or finished goods.

2.      Per unit standard costs used in budgeting this year were:

Direct material            $ 6

Direct labor                 16

3.      We are still using two hours per unit as standard labor time.

4.      Actual material prices have been 5% less than expected.

5.      Actual direct labor costs have been $8.20 per hour due to the increase in medical benefits granted last January.

A copy of the performance report is shown as Exhibit 1.

Waltham Motors Division

Exhibit 1        Performance Report, May 2004

                                                                                    Budget             Actual             Variance        

Units                                                                                18,000              14,000                4,000

Sales                                                                            $864,000          $686,000          $178,000       U

Variable manufacturing costs:

            Direct material                                                 $108,000          $ 85,400           $ 22,600        F

            Direct labor                                                        288,000          246,000              42,000        F

            Indirect labor                                                        57,600             44,400              13,200        F

            Idle time                                                               14,400             14,200                   200        F

            Cleanup time                                                        10,800             10,000                   800        F

            Miscellaneous supplies                                           5,200               4,000                1,200        F

            Total variable manufacturing cost                      $484,000          $404,000          $ 80,000        F

Variable shipping costs                                                 $  28,800          $  28,000          $      800        F

            Total variable costs                                           $512,800          $432,000          $ 80,800        F

Contribution margin                                                     $351,200          $254,000          $ 97,200        U

Nonvariable manufacturing costs:

            Supervision                                                      $  57,600          $  58,800          $   1,200        U

            Rent                                                                     20,000              20,000                    ---

            Depreciation                                                        60,000              60,000                    ---

            Other                                                                   10,400              10,400                    ---

Total nonvariable manufacturing costs               $148,000          $149,200          $   1,200        U

Selling and administrative costs                                      112,000            112,000                    ---

            Total nonvariable and programmed costs            $260,000          $261,200          $   1,200        U

Operating income (loss)                                                   91,200              (7,200)           (98,400)      U

Dot Image
expertguy Posted By :
Questions: 34513 Tutorials: 33884
Tutorials for this Question

BUSN6070 Waltham Motors Assignment

Tutorial # 00611973
Posted On: 06/29/2020 04:01 AM
Feedback Score: Not rated yet!
Purchased By: 2
expertguy
Posted By:
Questions:
34513
Tutorials:
33884
Report this Tutorial as Inappropriate
Tutorial Preview
The solution of BUSN6070 Waltham Motors Assignment...
Attachments
BUSN6070_Waltham_Motors_xlsx_(1).xlsx (33.61 KB)
Waltham_Motors_Performance_Report_(2).docx (37.06 KB)

Great! We have found the solution of this question!

Related Questions
Research the web and find an appropriate incident related
Research the web and find an appropriate incident related to either a successful or failed penetration testing effort, or a successful or unsuccessful hacking attempt against an organization, business …
Chemical Reaction and A Nuclear Reaction
Chemical Reaction and A Nuclear Reaction Questions 1. Which type of radiation consists of a fast stream of negatively charged particles? (2 points) alpha particles beta particles gamma …
What is a Normal Family - As a teacher or support staff member
What is a Normal Family?  As a teacher or support staff member you will work with many different families throughout your career. Our perception of family generally comes from our experiences …
Extra Credit Discussion - What are some takeaways
Extra Credit Discussion After reviewing this week's content, you may participate in this discussion for extra credit and learning. It will be worth up to 10 points depending on your p …
As part of the control phase of the improvement project
Part 1: A.  As part of the control phase of the improvement project, create a process control plan by doing the following: 1.  Define measures or key indicators that will be used to tr …
Public Narratives a Case for The Education of Refugees Essay
BU Public Narratives a Case for The Education of Refugees Essay https://www.independent.co.uk/voices/child-refugee... This is the public narratives I want to focus on.  The requirements …
RWS305W Module 4 The Pessimist Student Prompt
RWS305W SDSU Mod 4 The Pessimist Student Prompt Paper RWS 305W Online Journaling: An Exercise in Revision and Reflection  This summer we have been journaling twice weekly to push our thinki …
The Role Played by Social Media Platforms as Part
The Role Played by Social Media Platforms as Part of The Corrections Essay Prior to beginning work on this discussion, review a state’s department of corrections Twitter (Links to a …
Hypothetical Situation that Exhibits the Ethical Dilemma
Hypothetical Situation that Exhibits the Ethical Dilemma Select one of the following ethical dilemma topics for your analysis: Appropriate use of force Torture in the war on terror Crackd …
Ethnographic Methods to Gather Data for a Research Project
Ethnographic Methods to Gather Data for a Research Project Questions 1. How did the author gather data for this project?  Is this a  quantitative or qualitative project?  Would you s …
Recent Questions
Examine the several different types of data insights that occur
Question Examine the several different types of data insights that occur in big data analytics:  ? Offer novel knowledge  ? Provide causation relationships  ? Add a competit …
Computer science - Is virtualisation cost effective
Computer science question Is virtualisation cost effective and does it support green IT? Contents Introduction Is Virtualisation cost effective? Running out of space? Needing Virtualisa …
Studying Computing involves developing both subject
Studying Computing involves developing both subject-specific and transferable skills. Describe the skills you have used prior to university, and discuss how you would expect those skills to develop wh …
Computer Science - Discuss the critical characteristics
Computer Science Question Assignment 1 - Question 1: Discuss the critical characteristics of communication channels in data communications. Explain how bandwidth and communication medium affe …
Walden NURS6512N Week 3 Quiz Latest 2024
NURS6512N Advanced Health Assessment and Diagnostic Reasoning Week 3 Quiz A patient states feeling like they wasted time and money trying to lose weight with no success. Which response by the n …
Walden NURS6512N Week 1 Quiz Latest 2024
NURS6512N Advanced Health Assessment and Diagnostic Reasoning Week 1 Quiz   Question 1 Identify the false options about collecting gender identity and sexual orientation informatio …
GCU NRS445 Assignment Latest 2024
GCU NRS445 ASSIGNMENT Assessment Description The purpose of this assignment is to refine the PICOT question you developed in the discussion forum this week and begin evaluating literature tha …
GCU NRS445 Discussion (dq1+dq2) Latest 2024
GCU NRS445 DQ1 Assessment Description After reviewing the course textbook, summarize the history of nursing research. Discuss the importance of nursing research as it relates to applying evid …
Aspen DNP845 Complete Course latest 2024
DNP845 Theoretical and Scientific Underpinnings Module 1 Journal  Reflect on The Essentials of Baccalaureate Education for Professional Nursing Practice. How have you previously met Essent …
Aspen DNP845 All Assignments latest 2024
DNP845 Theoretical and Scientific Underpinnings Module 1 Assignment Write a 1500-2000 word essay addressing each of the following points. Be sure to completely address all the questions for each …