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.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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![Required 1
Required 2
Calculate the spending variances for March. (Indicate the effect of each variance by selecting "F" for fav
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
Required 1
Required 2](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fab1417a7-4fa3-418b-951f-a3e83ba781d5%2F7b275e53-63be-4927-8421-9077bec848c2%2Fh4qrito_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Required 1
Required 2
Calculate the spending variances for March. (Indicate the effect of each variance by selecting "F" for fav
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
Required 1
Required 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
Cost Formula
$20,600 + $0.10 per machine-hour
$40,000 + $1.60 per machine-hour
$0.30 per machine-hour
$24,200
$ 78,100
$8,400
$ 149,600
$ 71,500
Utilities
Maintenance
Supplies
Indirect labor $130,000 + $0.70 per machine-hour
Depreciation
$70,000
During March, the company worked 26,000 machine-hours and produced 15,000 units. The company had originally planned to work
30,000 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](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fab1417a7-4fa3-418b-951f-a3e83ba781d5%2F7b275e53-63be-4927-8421-9077bec848c2%2Fixc4qmq_processed.jpeg&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 in
March
Cost Formula
$20,600 + $0.10 per machine-hour
$40,000 + $1.60 per machine-hour
$0.30 per machine-hour
$24,200
$ 78,100
$8,400
$ 149,600
$ 71,500
Utilities
Maintenance
Supplies
Indirect labor $130,000 + $0.70 per machine-hour
Depreciation
$70,000
During March, the company worked 26,000 machine-hours and produced 15,000 units. The company had originally planned to work
30,000 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
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