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Required: 1. Prepare a flexible budget for March. 2. Prepare a report showing the spending variances for March.

Required: 1. Prepare a flexible budget for March. 2. Prepare a report showing the spending variances for March.

FINANCIAL ACCOUNTING
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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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 $ 22,060 $ 63,400 $6,400 $ 124,500 $69,700 Utilities Maintenance Supplies Indirect labor Depreciation During March, the company worked 20,000 machine-hours and produced 14,000 units. The company had originally planned to work 22,000 machine-hours during March. Cost Formula $16,300+ $0.18 per machine-hour. $38,800+ $1.40 per machine-hour $0.30 per machine-hour Required: 1. Prepare a flexible budget for March. 2. Prepare a report showing the spending variances for March. $95,000+ $1.30 per machine-hour $68,000 Complete this question by entering your answers in the tabs below. Required 1 Required 2 Machine-hours Prepare a flexible budget for March. (Input all amounts as positive values.) FAB Corporation Flexible Budget For the Month Ended March 31 Utilities Maintenance Supplies Indirect labor Depreciation Total < Required 1 Required 2 >
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 $ 22,060 $ 63,400 $6,400 $ 124,500 $69,700 Utilities Maintenance Supplies Indirect labor Depreciation During March, the company worked 20,000 machine-hours and produced 14,000 units. The company had originally planned to work 22,000 machine-hours during March. Cost Formula $16,300+ $0.18 per machine-hour. $38,800+ $1.40 per machine-hour $0.30 per machine-hour Required: 1. Prepare a flexible budget for March. 2. Prepare a report showing the spending variances for March. $95,000+ $1.30 per machine-hour $68,000 Complete this question by entering your answers in the tabs below. Required 1 Required 2 Machine-hours Prepare a flexible budget for March. (Input all amounts as positive values.) FAB Corporation Flexible Budget For the Month Ended March 31 Utilities Maintenance Supplies Indirect labor Depreciation Total < Required 1 Required 2 >
s 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 $ 22,060 $ 63,400 $ 6,400 $ 124,500 $ 69,700 Utilities Maintenance Supplies. Indirect labor Depreciation During March, the company worked 20,000 machine-hours and produced 14,000 units. The company had originally 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. Required 1 Cost Formula $16,300+ $0.18 per machine-hour $38,800+ $1.40 per machine-hour $0.30 per machine-hour Complete this question by entering your answers in the tabs below. $95,000+ $1.30 per machine-hour $68,000 Utilities Prepare a report showing the spending 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.) Maintenance Supplies Indirect labor Depreciation Total Required 2 FAB Corporation Spending Variances For the Month Ended March 31 < Required 1 Required 2
Transcribed Image Text:s 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 $ 22,060 $ 63,400 $ 6,400 $ 124,500 $ 69,700 Utilities Maintenance Supplies. Indirect labor Depreciation During March, the company worked 20,000 machine-hours and produced 14,000 units. The company had originally 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. Required 1 Cost Formula $16,300+ $0.18 per machine-hour $38,800+ $1.40 per machine-hour $0.30 per machine-hour Complete this question by entering your answers in the tabs below. $95,000+ $1.30 per machine-hour $68,000 Utilities Prepare a report showing the spending 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.) Maintenance Supplies Indirect labor Depreciation Total Required 2 FAB Corporation Spending Variances For the Month Ended March 31 < Required 1 Required 2
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