Required: 1. Calculate the activity variances for March. 2. Calculate the spending variances for March.
Required: 1. Calculate the activity variances for March. 2. Calculate the spending variances for March.
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter8: Budgeting For Planning And Control
Section: Chapter Questions
Problem 40P: The controller for Muir Companys Salem plant is analyzing overhead in order to determine appropriate...
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![Complete this question by entering your answers in the tabs below.
Required 1
Required 2
Calculate the activity 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.)
FAB Corporation
Activity Variances
For the Month Ended March 31
Utilities
Maintenance
Supplies
Indirect labor
Depreciation
Total
Complete this question by entering your answers in the tabs below.
Required 1
Required 2
Calculate the spending variances for March. (Indicate the effect of each variance by selecting "F" for favorable,
unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.)
FAB Corporation
Spending Variances
For the Month Ended March 31
Utilities
Maintenance
Supplies
Indirect labor
Depreciation
Total](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F5d601f64-088b-4fac-bdc0-28942335e730%2F05f2d239-1304-4e7f-8222-fcf84447e192%2Frf1p45e_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Complete this question by entering your answers in the tabs below.
Required 1
Required 2
Calculate the activity 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.)
FAB Corporation
Activity Variances
For the Month Ended March 31
Utilities
Maintenance
Supplies
Indirect labor
Depreciation
Total
Complete this question by entering your answers in the tabs below.
Required 1
Required 2
Calculate the spending variances for March. (Indicate the effect of each variance by selecting "F" for favorable,
unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.)
FAB Corporation
Spending Variances
For the Month Ended March 31
Utilities
Maintenance
Supplies
Indirect labor
Depreciation
Total
![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
Cost Formula
in March
$ 21,760
$ 66,300
$ 14,200
$ 118,800
$ 69,800
Utilities
$16,900 + $0.17 per machine-hour
$38,300 + $1.90 per machine-hour
$0.80 per machine-hour
$94,500 + $1.30 per machine-hour
$68,100
Maintenance
Supplies
Indirect labor
Depreciation
During March, the company worked 16,000 machine-hours and produced 10,000 units. The company had originally planned to work
18,000 machine-hours during March.
Required:
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. (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](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F5d601f64-088b-4fac-bdc0-28942335e730%2F05f2d239-1304-4e7f-8222-fcf84447e192%2Fbqgsz2_processed.png&w=3840&q=75)
Transcribed Image Text: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
Cost Formula
in March
$ 21,760
$ 66,300
$ 14,200
$ 118,800
$ 69,800
Utilities
$16,900 + $0.17 per machine-hour
$38,300 + $1.90 per machine-hour
$0.80 per machine-hour
$94,500 + $1.30 per machine-hour
$68,100
Maintenance
Supplies
Indirect labor
Depreciation
During March, the company worked 16,000 machine-hours and produced 10,000 units. The company had originally planned to work
18,000 machine-hours during March.
Required:
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. (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
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