Problem 9-18 (Algo) Activity and Spending Variances [LO9-1, LO9-2, LO9-3] You have just been hired by FAB Corporation, the manufacturer of a revolutionary new garage door opening device. The president asked you to review the company's costing system and "do what you can to help us get better control of our manufacturing overhead costs." You find the company has never used a flexible budget, and you suggest preparing such a budget would be an excellent first step in overhead planning and control. After much effort and analysis, you estimated the following cost formulas and gathered the following actual cost data for March: Utilities Maintenance Supplies Indirect labor Depreciation Cost Formula $16,800+ $0.17 per machine-hour $38,300 + $1.60 per machine-hour $0.50 per machine-hour $94,300 + $1.60 per machine-hour $68,300 Actual Cost in March $ 22,510 $ 68,900 $ 11,300 $ 132,000 $ 70,000 During March, the company worked 21,000 machine-hours and produced 15,000 units. The company originally planned to work 23,000 machine-hours during March. Required: 1. Calculate the activity variances for March. 2. Calculate the spending variances for March. Answer is complete but not entirely correct. 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 For the Month Ended March 31 Utilities Maintenance Supplies Indirect labor Depreciation Total $ 340 F 3,220 F 1,600 F 3,200 F None $ 8,360 None > > > Required 1 Required 2 >
Problem 9-18 (Algo) Activity and Spending Variances [LO9-1, LO9-2, LO9-3] You have just been hired by FAB Corporation, the manufacturer of a revolutionary new garage door opening device. The president asked you to review the company's costing system and "do what you can to help us get better control of our manufacturing overhead costs." You find the company has never used a flexible budget, and you suggest preparing such a budget would be an excellent first step in overhead planning and control. After much effort and analysis, you estimated the following cost formulas and gathered the following actual cost data for March: Utilities Maintenance Supplies Indirect labor Depreciation Cost Formula $16,800+ $0.17 per machine-hour $38,300 + $1.60 per machine-hour $0.50 per machine-hour $94,300 + $1.60 per machine-hour $68,300 Actual Cost in March $ 22,510 $ 68,900 $ 11,300 $ 132,000 $ 70,000 During March, the company worked 21,000 machine-hours and produced 15,000 units. The company originally planned to work 23,000 machine-hours during March. Required: 1. Calculate the activity variances for March. 2. Calculate the spending variances for March. Answer is complete but not entirely correct. 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 For the Month Ended March 31 Utilities Maintenance Supplies Indirect labor Depreciation Total $ 340 F 3,220 F 1,600 F 3,200 F None $ 8,360 None > > > Required 1 Required 2 >
Cornerstones of Cost Management (Cornerstones Series)
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Author:Don R. Hansen, Maryanne M. Mowen
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Chapter5: Product And Service Costing: Job-order System
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Problem 27P: Firenza Company manufactures specialty tools to customer order. Budgeted overhead for the coming...
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![Problem 9-18 (Algo) Activity and Spending Variances [LO9-1, LO9-2, LO9-3]
You have just been hired by FAB Corporation, the manufacturer of a revolutionary new garage door opening device. The president
asked you to review the company's costing system and "do what you can to help us get better control of our manufacturing overhead
costs." You find the company has never used a flexible budget, and you suggest preparing such a budget would be an excellent first
step in overhead planning and control.
After much effort and analysis, you estimated the following cost formulas and gathered the following actual cost data for March:
Utilities
Maintenance
Supplies
Indirect labor
Depreciation
Cost Formula
$16,800+ $0.17 per machine-hour
$38,300 + $1.60 per machine-hour
$0.50 per machine-hour
$94,300 + $1.60 per machine-hour
$68,300
Actual Cost
in March
$ 22,510
$ 68,900
$ 11,300
$ 132,000
$ 70,000
During March, the company worked 21,000 machine-hours and produced 15,000 units. The company originally planned to work
23,000 machine-hours during March.
Required:
1. Calculate the activity variances for March.
2. Calculate the spending variances for March.
Answer is complete but not entirely correct.
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
For the Month Ended March 31
Utilities
Maintenance
Supplies
Indirect labor
Depreciation
Total
$
340
F
3,220
F
1,600
F
3,200
F
None
$
8,360
None
>
>
>
Required 1
Required 2 >](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F3f0ce81d-5c85-4fef-ae34-8b2ee8425a86%2F11bfb64b-08d6-4418-b4ae-4b8ddbaf5d75%2Fqqzywgm_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Problem 9-18 (Algo) Activity and Spending Variances [LO9-1, LO9-2, LO9-3]
You have just been hired by FAB Corporation, the manufacturer of a revolutionary new garage door opening device. The president
asked you to review the company's costing system and "do what you can to help us get better control of our manufacturing overhead
costs." You find the company has never used a flexible budget, and you suggest preparing such a budget would be an excellent first
step in overhead planning and control.
After much effort and analysis, you estimated the following cost formulas and gathered the following actual cost data for March:
Utilities
Maintenance
Supplies
Indirect labor
Depreciation
Cost Formula
$16,800+ $0.17 per machine-hour
$38,300 + $1.60 per machine-hour
$0.50 per machine-hour
$94,300 + $1.60 per machine-hour
$68,300
Actual Cost
in March
$ 22,510
$ 68,900
$ 11,300
$ 132,000
$ 70,000
During March, the company worked 21,000 machine-hours and produced 15,000 units. The company originally planned to work
23,000 machine-hours during March.
Required:
1. Calculate the activity variances for March.
2. Calculate the spending variances for March.
Answer is complete but not entirely correct.
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
For the Month Ended March 31
Utilities
Maintenance
Supplies
Indirect labor
Depreciation
Total
$
340
F
3,220
F
1,600
F
3,200
F
None
$
8,360
None
>
>
>
Required 1
Required 2 >
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