Submitted by: Submitted by gumsi
Views: 311
Words: 783
Pages: 4
Category: Business and Industry
Date Submitted: 12/05/2010 03:37 PM
Randhart Foam Company
Anton Leone, president of Randhart Foam, was reviewing summary departmental cost reports early in January 2000 when the data for the automotive department caught his eye.
| |Automotive Department Summary |
| |1998 |1999 |Variance |
|Raw Materials |$425,000 |$522,000 |$97,000 U |
|Direct Labor |65,000 |87,000 |22,000 U |
|Department Overhead | | | |
|Indirect Labor |39,500 |10,500 |(29,000) F |
|Supervision |10,000 |10,000 |— |
|Factory Overhead |32,720 |36,295 |3,575 U |
|Depreciation |25,000 |50,000 |25,000 U |
|General Burden | 73,700 | 84,500 | 10,800 U |
|Total |$670,920 |$800,295 |$129,375 U |
Mr. Leone was surprised and a bit disappointed at the cost increases shown. The only area which seemed to have improved was indirect labor. He immediately requested an in-depth investigation. This investigation produced the following information.
The automotive department produces only two types of padding for car seats. The two types, bucket seats and bench seats, require different amounts of foam padding. A bench seat requires more material since it is much larger (three persons versus one for a bucket seat). The bucket seat, however, requires significantly...