Document g38pm02b3RBo5Ln9vVenzZ69

Acme Plant September, 1966 Actual Operating Profit was 40# less than the budgeted figure for September as shown in the following comparison: Operating Profit: Actual Budget Actual Under Budget $113,522 187.624 $ 74,102 PLAINTIFF'S EXHIBIT Budget Un i t Amount ______ Actua I________ Un i t Amount Over (+)/Under (-) Un i t Amount Rock Tons Plaster Tons Bd.,Lath,Tile MSF Joint System Ton Other Products Tota 1 5,500 700 17,230 250 - $ 18,590 18,529 689,200 36,4^... 1 ,500 $764, ' a9 2,266 1,872 10,888 238 - $ 14,839 40,469 421,926 40,451 1 .634 $519,319 -3,234 t1,172 -6,342 -12 - $ -3,751 +21,940 -267,274 +4,011 + 134 $-244,940 Rock Processing Cost: This cu. .^s $.27 per ton above standard because of low production, a $1350 unfavorable variation in operational supplies and equipment rental, and a $1032 unfavorable variation in extraordinary maintenance. The monthly production of 9378 to. , was /429 tons less than August's YTD average monthly production. This orougnT about high unit costs and re sulted in the usage of 2629 tons oi August's closing inventory. The unfavorable variation in Operational Supplies and Equipment Rentals was due to a $1246 charge for the rental of a bulldozer which is now being used in stripping, but was not considered in standards. ** The undesireable amount of $1032 in extraordinary maintenance was the result of the Distribution of an accrued budgeted amount by a predetermined curve which was based on a higher estimated production. Plaster Raw Materials Cost: The standard unit cost was $4.64 per ton after having considered September's product mix. Thus, an unfavorable variation of $.53 per ton existed for the month. It consisted of an unfavorable price ($44-/) and usage ($751) variations. The price variation resulted from the purchase of 80,300 bags vlt $10.20 per thousand above standard unit cost. The usage variation was the result of the come back of a $1300 inventory error which was somewhat offset by favorable variations in several raw materials. Plaster Processing Cost: A favorable variation of $.27 per ton was displayed. It is felt that the large quantities of production in re grinding (194# above August's YTD averag monthly figure), tubing(295# above August's YT0 average monthly production), and Plaster Packing and Shipping (194# above Augusl's YTD average monthly figure) were the main roo'-ons for I he favorable cosf condition having existed. SGP 0002801 Acme Pfar\+ 2 September, 1966 Roor-ri nnd_ _ L 7 * *1 i ' i ' ' :1 > - i ' ; .1 17. ryt of gross wlii'li i-. I . Gfi above s I hk' >> n. I ' i ............ 1 < I '< ' ''. i." . fj f_> I voir i-'lion ( i Salable Board. 1|< wev"r , ! Im m >> i , .! i i t , was ,k I im I ly unlnvoi il> I >, for included in September's ligninswas . lb MSF of board which was pto- duced in August but not recorded as such. This amounted to $3050. Also, the plant produced 194 MSF more dunnage board than was needed, with re spect to standard, for September's shipments. This added a $2110 un favorable variation to the waste and off goods variation. Paper Cost: The standard cost of paper was $7.80 per MSF after September's product tnix was taken into consideration. Thus, an unfavorable variation of $.67 per MSF existed. An urn' r/ -sable usage variation of $16,191 and a some whaI oit-softing favoratuc pr ice var iafion of $9,082 were the factors invoIved. The main porr ions of the variations were due to the discovery of large usage and inventory errors at the plant by Mr. Rodda. The remainder of the vorialion was attributed to the monthly activity. An unfavorable usage variation of 34320 existed for the month. This was some what offset by an $827 favorable price variation. The price dif ference was the result of Pryor's paper weighing less than standard (72# ivory weighed 71.5# and 72# greyback weighed 71.2#). Board Raw Materials Cost; After product mix was taken into consideration, the standard unit cost was 2.01. Thus, a $.03 per MSF variation existed. Flowever, a credit of $2500 to correct a previous month duplication error, offset a $2058 unfavorable usage variation. The usage variation was due mainly to the following: ASP Clay: ($-1029) -- not considered in 1966 standards. Lignosite: ($-462) -- the large quantity of usage was because of tne need to decrease dryi ng#4 ime in light weight board, xorasper... : ($-429) -- not considered in 1966 standards. It is a very good, but high cost, dispersing agent which reduces drying time of board. It can be used in place of Lignosite. .Bo. ' Processino Cost; Board and Lath manufacturing cost was $2475. o\ er s'- card, and board warehousing and loading cost was less than standarc by SI 02. i_. ' ar. rh Manufactur i nq had the major part of its variation orougnt a. " by s.vorable variations of $1186 in operating labor, of Si 165 in Ma i ivrena . ^.abor, of $941 in Extraordinary Maintenance, and of $387 in waTer whi~. were some what offset by a $i227 favorable difference in Maimenance Supplies. it is felt that the unfavorable variations can be ibureo to the machine hours (standard is based on machine hours) having 220 nours below standard. ; "iv. :rnt> I e vorialion was brought about by the efforts of the plant . educe Ihcir inventory of supplies via decreasing purchases. ... hi', d Vi.u chousing and Load i no's variation consisted of favorable variations oi $1879 in Operating Labor and $1613 in Operational Supplies. Purchases of SGP 0002802 Acme P(ant September, 1966 "In' I i 'in I n 11" i n- .lo i n t S vs lorn Raw Mn I cr i a I s Co, i : [ho standard unit cost was $77,81 per ton after September's product mix was considered. Resulting in a $8.28 per ton favorable variation. The major part of "^hhe variation was the result of having purchased casein af $13.30 per cwt. less than the standard unit cost. Joint System Processing Cost: A favorable variation of $1.60 per ton existed for the month. Favorable variations of $510 in Operating Labor and $246 in Maintenance Labor were the major factors causing the desi reab I e condition. The high quantity of production (120 tons above standard) seems to tiave been the main reason for the favorable unit costs. Administrative Cost: A $4,000 unfavorable variation existed in the area of administration. Tne cos; for transferring John Rodda to Acme was the reason for $2018 of the above difference. The remainder of the variations was mainly due to the plant's having accrued and remitted payment for the telephone, telegraph, and teletype charges for the month, thereby duplicating the costs. 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