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review the company's costing system and what you can to help us get better contro u find the company has never used a flexible budget, and you suggest preparing such a buc verhead planning and control. ch effort and analysis, you estimated the following cost formulas and gathered the following Actual Cost in March. $ 21,890 ies nance es $ 72,600 $ 12,400 $ 137,400 $ 69,700 ct labor iation arch, the company worked 19,000 machine-hours and produced 13,000 units. The company Cost Formula $16,100+ $0.19 per machine-hour $38,900+ $1.90 per machine-hour $0.60 per machine-hour $94,500 $68,000 $2.00 per machine-hour

review the company's costing system and what you can to help us get better contro u find the company has never used a flexible budget, and you suggest preparing such a buc verhead planning and control. ch effort and analysis, you estimated the following cost formulas and gathered the following Actual Cost in March. $ 21,890 ies nance es $ 72,600 $ 12,400 $ 137,400 $ 69,700 ct labor iation arch, the company worked 19,000 machine-hours and produced 13,000 units. The company Cost Formula $16,100+ $0.19 per machine-hour $38,900+ $1.90 per machine-hour $0.60 per machine-hour $94,500 $68,000 $2.00 per machine-hour

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 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 Cost Formula $16,100+ $0.19 per machine-hour $38,900+ $1.90 per machine-hour Supplies $0.60 per machine-hour Indirect labor $94,500 $2.00 per machine-hour Depreciation $68,000 During March, the company worked 19,000 machine-hours and produced 13,000 units. The company originally planned to work 21,000 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 Actual Cost in March. $21,890 $ 72,600 $ 12,400 $ 137,400 $ 69,700 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
Transcribed Image Text: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 Cost Formula $16,100+ $0.19 per machine-hour $38,900+ $1.90 per machine-hour Supplies $0.60 per machine-hour Indirect labor $94,500 $2.00 per machine-hour Depreciation $68,000 During March, the company worked 19,000 machine-hours and produced 13,000 units. The company originally planned to work 21,000 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 Actual Cost in March. $21,890 $ 72,600 $ 12,400 $ 137,400 $ 69,700 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
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