Problem 9-23 (Algo) Flexible Budgets and Spending Variances [LO9-1, LO9-2] You have just been hired by FAB Corporation, the manufacturer of a revolutionary new garage door opening device. The president has asked that you review the company's costing system and "do what you can to help us get better control of our manufacturing overhead costs." You find that the company has never used a flexible budget, and you suggest that preparing such a budget would be an excellent first step in overhead planning and control. After much effort and analysis, you determined the following cost formulas and gathered the following actual cost data for March: Actual Cost In March $ 20,100 $ 61,000 $ 8,800 Utilities Maintenance Supplies Indirect labor Depreciation Cost Formula $16,200 $0.14 per machine-hour $38,700+ $1.90 per machine-hour $0.60 per machine-hour 594,700+ $1.30 per machine-hour $68,400 During March, the company worked 13,000 machine-hours and produced 7,000 units. The company had originally planned to work 15,000 machine-hours during March. Required: 1. Prepare a flexible budget for March. 2. Prepare a report showing the spending variances for March Complete this question by entering your answers in the tabs below. Required 1 Required 2 Machine-hours Utilities Maintenance Supplies Indirect labor Prepare a flexible budget for March. (Input all amounts as positive values.) FAB Corporation Flexible Budget For the Month Ended March 31 $ 115,100 $ 70,100
Problem 9-23 (Algo) Flexible Budgets and Spending Variances [LO9-1, LO9-2] You have just been hired by FAB Corporation, the manufacturer of a revolutionary new garage door opening device. The president has asked that you review the company's costing system and "do what you can to help us get better control of our manufacturing overhead costs." You find that the company has never used a flexible budget, and you suggest that preparing such a budget would be an excellent first step in overhead planning and control. After much effort and analysis, you determined the following cost formulas and gathered the following actual cost data for March: Actual Cost In March $ 20,100 $ 61,000 $ 8,800 Utilities Maintenance Supplies Indirect labor Depreciation Cost Formula $16,200 $0.14 per machine-hour $38,700+ $1.90 per machine-hour $0.60 per machine-hour 594,700+ $1.30 per machine-hour $68,400 During March, the company worked 13,000 machine-hours and produced 7,000 units. The company had originally planned to work 15,000 machine-hours during March. Required: 1. Prepare a flexible budget for March. 2. Prepare a report showing the spending variances for March Complete this question by entering your answers in the tabs below. Required 1 Required 2 Machine-hours Utilities Maintenance Supplies Indirect labor Prepare a flexible budget for March. (Input all amounts as positive values.) FAB Corporation Flexible Budget For the Month Ended March 31 $ 115,100 $ 70,100
Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter9: Profit Planning And Flexible Budgets
Section: Chapter Questions
Problem 5MCQ: A moving, 12-month budget that is updated monthly is a. not used by manufacturing firms. b. a waste...
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Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
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![Problem 9-23 (Algo) Flexible Budgets and Spending Variances [LO9-1, LO9-2]
You have just been hired by FAB Corporation, the manufacturer of a revolutionary new garage door opening device. The president has
asked that you review the company's costing system and "do what you can to help us get better control of our manufacturing
overhead costs." You find that the company has never used a flexible budget, and you suggest that preparing such a budget would be
an excellent first step in overhead planning and control.
After much effort and analysis, you determined the following cost formulas and gathered the following actual cost data for March:
Utilities
Maintenance
Supplies
Indirect labor
Depreciation
Cost Formula
$16,200+ $0.14 per machine-hour
$38,700+ $1.90 per machine-hour
$0.60 per machine-hour
During March, the company worked 13,000 machine-hours and produced 7,000 units. The company had originally planned to work
15,000 machine-hours during March.
Required:
1. Prepare a flexible budget for March.
2. Prepare a report showing the spending variances for March.
Required 1
594,700+ $1.30 per machine-hour
$68,400
Complete this question by entering your answers in the tabs below.
Machine-hours
Utilities
Maintenance
Supplies
Indirect labor
Actual Cost in
March
$ 20,100
$ 61,000
$ 8,800
$ 115,100
$ 70,100
Required 2
Prepare a flexible budget for March. (Input all amounts as positive values.)
FAB Corporation
Flexible Budget
For the Month Ended March 31](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fbe10320e-4a25-401f-8cbc-fb37205367de%2Fb905dec2-6136-44df-8a25-de6196c5f377%2Fm4qvkh9_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Problem 9-23 (Algo) Flexible Budgets and Spending Variances [LO9-1, LO9-2]
You have just been hired by FAB Corporation, the manufacturer of a revolutionary new garage door opening device. The president has
asked that you review the company's costing system and "do what you can to help us get better control of our manufacturing
overhead costs." You find that the company has never used a flexible budget, and you suggest that preparing such a budget would be
an excellent first step in overhead planning and control.
After much effort and analysis, you determined the following cost formulas and gathered the following actual cost data for March:
Utilities
Maintenance
Supplies
Indirect labor
Depreciation
Cost Formula
$16,200+ $0.14 per machine-hour
$38,700+ $1.90 per machine-hour
$0.60 per machine-hour
During March, the company worked 13,000 machine-hours and produced 7,000 units. The company had originally planned to work
15,000 machine-hours during March.
Required:
1. Prepare a flexible budget for March.
2. Prepare a report showing the spending variances for March.
Required 1
594,700+ $1.30 per machine-hour
$68,400
Complete this question by entering your answers in the tabs below.
Machine-hours
Utilities
Maintenance
Supplies
Indirect labor
Actual Cost in
March
$ 20,100
$ 61,000
$ 8,800
$ 115,100
$ 70,100
Required 2
Prepare a flexible budget for March. (Input all amounts as positive values.)
FAB Corporation
Flexible Budget
For the Month Ended March 31
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