You have just been hired by FAB Corporation, the manufacturer of a revolutionary new garage door openingdevice. The president has asked that you review the company's costing system and "do what you can to help usget better control of our manufacturing overhead costs." You find that the company has never used a flexiblebudget, and you suggest that preparing such a budget would be an excellent first step in overhead planning andcontrol.After much effort and analysis, you determined the following cost formulas and gathered the following actual costdata for March:Actual Costin March$ 22,080$ 78,500$ 15,200$ 133,000$ 69,600Cost Formula$16,100 + $0.19 per machine-hour$38,500 + $2.10 per machine-hour$0.70 per machine-hour$94,700 + $1.70 per machine-hour$67,900UtilitiesMaintenanceSuppliesIndirect laborDepreciationDuring March, the company worked 20,000 machine-hours and produced 14,000 units. The company hadoriginally planned to work 22,000 machine-hours during March.Required:1. Prepare a flexible budget for March.2. Prepare a report showing the spending variances for March.

Name: You have just been hired by FAB Corporation, the manufacturer of a re
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Description: You have just been hired by FAB Corporation, the manufacturer of a revolutionary new garage door openingdevice. The president has asked that you review the company's costing system and "do what you can to help usget better control of our manufacturi

Activity variances are based on Budgeted amounts at the planned level and budgeted amounts at the…

Business

Accounting

e just been hired by FAB Corporation, the manufacturer of a revolutionary new garage door ope The president has asked that you review the company's costing system and “do what you can to er control of our manufacturing overhead costs." You find that the company has never used a fle and you suggest that preparing such a budget would be an excellent first step in overhead plan ch effort and analysis, you determined the following cost formulas and gathered the following a March: Actual Cost in March $ 22,080 $ 78,500 $ 15,200 $ 133,000 $ 69,600 Cost Formula cies $16,100 + $0.19 per machine-hour $38,500 + $2.10 per machine-hour $0.70 per machine-hour $94,700 + $1.70 per machine-hour $67,900 enance ies ect labor ciation

e just been hired by FAB Corporation, the manufacturer of a revolutionary new garage door ope The president has asked that you review the company's costing system and “do what you can to er control of our manufacturing overhead costs." You find that the company has never used a fle and you suggest that preparing such a budget would be an excellent first step in overhead plan ch effort and analysis, you determined the following cost formulas and gathered the following a March: Actual Cost in March $ 22,080 $ 78,500 $ 15,200 $ 133,000 $ 69,600 Cost Formula cies $16,100 + $0.19 per machine-hour $38,500 + $2.10 per machine-hour $0.70 per machine-hour $94,700 + $1.70 per machine-hour $67,900 enance ies ect labor ciation

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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The managerial accountant at Sunny Manufacturing needs to determine how many costs are fixed costs and how many costs are variable costs in the organization. The managerial accountant reported the following information: Use the high-low method to determine the cost equation and use machine hours as the base for a cost driver in the analysis. For the toolbar, press ALT+F10 (PC) or ALT+FN+F10 (Mac). Month Machine-Hours Total Cost January 1,800 $21,500 February 2,900 $23,200 March 1,000 $19,750 April 2,400 $21,000 May 3,400 $23,900
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Sarah has learned a lot from you over the past two months, and has compiled the following data for Sole Purpose Shoe Company for September using the techniques you taught her. She would like your help in preparing a Budget Performance Report for September. The company produced 3,000 pairs of shoes that required 10,500 units of material purchased at $8.20 per unit and 8,100 hours of labor at an hourly rate of $8.90 per hour during the month. Actual factory overhead during September was $23,400. When entering variances, use a negative number for a favorable cost variance, and a positive number for an unfavorable cost variance. Use the data in the following table to prepare the Budget Performance Report for Sole Purpose Shoe Company for September. Manufacturing Costs Standard Price Standard Quantity Standard Cost Per Unit Direct materials $8.40 per unit 3.6 units per pair $30.24 Direct labor $8.50 per hour 2.8 hours per pair 23.80 Factory overhead $2.60 per hour 2.8 hours per…
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