Reference no: EM132625467

Responsibility Cost Report (roque)

The following budget for August, 2020 was reported for the MAINTENANCE DEPARTMENT of YESYES Manufacturing Company:

YESYES MANUFACTURING COMPANY

Maintenance Department

Cost Budget for August 2020

Salaries and wages P20,000

Supplies 10,000

Communications 5,000

Light and water 3,000

Depreciation expense - tools and equipment 8,000

Total Budgeted cost 46,000

• During August, the maintenance department incurred a total cost of P50,000, composed of salaries and wages; P 25,000; supplies, P8,000; communications, P3,000, light and water, P3,000 and depreciation, P11,000.
• Salaries ang wages expense includes P5,000 representing the department manager's own salary. The manager does not have the control of hiring of personnel in his department. Salaries of all staff in the department are set with the use of the company's standard salary scheme for all employees.
• The manager can influence the incurrence of communication and supplies. The department does not have its own meter to measure consumption of light and water. The cost is computed for the whole factory and allocated to all the departments concerned.
• Acquisition and disposal of tools, equipments and other fixed assets are subject to approval by higher levels of management. Determination of useful life and depreciation method is covered by the company's depreciation policy.

Required:

Problem 1: Prepare responsibility cost report for the maintenance department.