**Title: Implementing a Flexible Budget for Manufacturing Overhead Control****Introduction:**You have been hired by FAB Corporation, a company manufacturing a revolutionary garage door opening device. Your task is to analyze and revamp the company’s costing system to improve control over manufacturing overhead costs. Notably, the company has yet to use a flexible budget, which could significantly enhance overhead planning and control.**Cost Analysis and Formulas:**Following detailed efforts and analysis, you have developed cost formulas and compiled actual cost data for March. Below is the breakdown:| **Cost Component** | **Cost Formula** | **Actual Cost in March** ||--------------------|--------------------------------|--------------------------|| Utilities | $16,700 + $0.15 per machine-hour| $20,900 || Maintenance | $38,800 + $1.50 per machine-hour| $56,600 || Supplies | $0.60 per machine-hour | $9,400 || Indirect labor | $94,600 + $1.30 per machine-hour| $116,300 || Depreciation | Fixed | $67,700 |**Operational Data:**- In March, the company utilized 14,000 machine-hours and produced 8,000 units.- The initial plan anticipated using 16,000 machine-hours during March.**Conclusion:**By introducing a flexible budget, FAB Corporation can potentially align its actual operational performance against planned activities, enabling better management and control of overhead costs. This approach is particularly beneficial in adapting to variations in operational activities, such as changes in machine-hour usage.**Next Steps:**Implementing the flexible budget will require monitoring the differences between planned and actual machine hours and adjusting the cost formulas accordingly. This continuous evaluation will facilitate more accurate cost management and improve overall financial performance. ### Instructions for Variance Calculations1. **Calculate the activity variances for March.**2. **Calculate the spending variances for March.**#### Steps to FollowPlease complete the following calculations by entering your answers in the designated tabs below.**Required 1** | **Required 2**#### Task for Required 1- **Calculate the activity variances for March.** **Note:** Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.---#### Variance Calculation Table**FAB Corporation****Activity Variances**For the Month Ended March 31| Category | Amount | Effect (F/U/None) ||------------------|--------|------------------|| Utilities | | || Maintenance | | || Supplies | | || Indirect labor | | || Depreciation | | || **Total** | | |---Ensure accuracy in calculating and assigning variances, as this affects financial assessments and strategic planning within the FAB Corporation. Use this guide to systematically determine the financial performance for the specified period.

The variance is the difference between the actual data and standard output of the production. The…

1. Calculate the activity variances for March. 2. Calculate the spending variances for March. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Calculate the activity variances for March. Note: Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values. FAB Corporation Activity Variances

1. Calculate the activity variances for March. 2. Calculate the spending variances for March. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Calculate the activity variances for March. Note: Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values. FAB Corporation Activity Variances

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Prepare a Flexible Budget Performance Report Required: Using Exhibit 9–8 as your guide, prepare a flexible budget performance report that shows the company’s revenue and spending variance and activity variances for august. Exhibit 9–8 Performance Report Combining Activity Variances with Revenue and Spending Variances
Calculate the spending variances for March. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (I.E., zero variance) Input all amounts as positive values.)
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Requirement 2. Prepare a flexible-budget-based variance analysis of the September performance. Begin with the actual results, then complete the flexible budget columns and the static budget columns. Label each variance as favorable or unfavorable. (For variances with a $0 balance, make sure to enter "0" in the appropriate field. If the variance is zero, do not select a label. Enter operating losses with a minus sign or parentheses.) Actual Results Units sold Revenues Variable costs Contribution margin Fixed costs Operating income (loss)
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Jake's Roof Repair has provided the following data concerning its costs Cost per Repair Hour $15.00 $ 7.70 $0.50 $ 3.50 $ 0.60 Wages and salaries Parts and supplies Equipeent depreciation Truck operating expenses Rent Administrative expenses Fixed Cost per Month $ 21,000 $2,730 $ 5,709 $ 4,020 $3,050 For example, wages and salaries should be $21,000 plus $15.00 per repair-hour. The company expected to work 2.900 repair-hours in May, but actually worked 2.800 repair-hours. The company expects its sales to be $52.00 per repair-hour Required: Compute the company's activity variances for May (Indicate the effect of each variance by selecting "F" for favorable. "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.)
Required 1 Required 2 Calculate the activity variances for March. Note: Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values. Utilities Maintenance Supplies Indirect labor Depreciation Total FAB Corporation Activity Variances For the Month Ended March 31 Show Transcribed Text Required 1 Required 2 FAB Corporation Spending Variances For the Month Ended March 31
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