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u have just been hired by FAB Corporation, the manufacturer of a revolutionary new garage door opening device. The pre ked that you review the company's costing system and "do what you can to help us get better control of our manufacturing erhead costs." You find that the company has never used a flexible budget, and you suggest that preparing such a budget excellent first step in overhead planning and control. ter much effort and analysis, you determined the following cost formulas and gathered the following actual cost data for Ma Utilities Maintenance Supplies Indirect labor Depreciation Cost Formula $0.20 per machine-hour $1.40 per machine-hour $16,300 $38,800 $0.70 per machine-hour $94,100 $1.20 per machine-hour $68,000 Actual Cost in March $ 22,100 $ 60,600 $ 13,800 $ 119,000 $ 69,700 During March, the company worked 18,000 machine-hours and produced 12,000 units. The company had originally planned to 20,000 machine-hours during March.

u have just been hired by FAB Corporation, the manufacturer of a revolutionary new garage door opening device. The pre ked that you review the company's costing system and "do what you can to help us get better control of our manufacturing erhead costs." You find that the company has never used a flexible budget, and you suggest that preparing such a budget excellent first step in overhead planning and control. ter much effort and analysis, you determined the following cost formulas and gathered the following actual cost data for Ma Utilities Maintenance Supplies Indirect labor Depreciation Cost Formula $0.20 per machine-hour $1.40 per machine-hour $16,300 $38,800 $0.70 per machine-hour $94,100 $1.20 per machine-hour $68,000 Actual Cost in March $ 22,100 $ 60,600 $ 13,800 $ 119,000 $ 69,700 During March, the company worked 18,000 machine-hours and produced 12,000 units. The company had originally planned to 20,000 machine-hours during 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: Utilities Maintenance Supplies Indirect labor Depreciation Cost Formula $16,300+ $0.20 per machine-hour $38,800+ $1.40 per machine-hour $0.70 per machine-hour $94,100 $68,000 Required 1 $1.20 per machine-hour Required: 1. Calculate the activity variances for March. 2. Calculate the spending variances for March. During March, the company worked 18,000 machine-hours and produced 12,000 units. The company had originally planned to work 20,000 machine-hours during March. Actual Cost in March. $ 22,100 $ 60,600 $ 13,800 Required 2 $ 119,000 $ 69,700 Complete this question by entering your answers in the tabs below.
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: Utilities Maintenance Supplies Indirect labor Depreciation Cost Formula $16,300+ $0.20 per machine-hour $38,800+ $1.40 per machine-hour $0.70 per machine-hour $94,100 $68,000 Required 1 $1.20 per machine-hour Required: 1. Calculate the activity variances for March. 2. Calculate the spending variances for March. During March, the company worked 18,000 machine-hours and produced 12,000 units. The company had originally planned to work 20,000 machine-hours during March. Actual Cost in March. $ 22,100 $ 60,600 $ 13,800 Required 2 $ 119,000 $ 69,700 Complete this question by entering your answers in the tabs below.
jes 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 Activity Variances For the Month Ended March 31 Utilities Maintenance Supplies Indirect labor Depreciation Total 2. Calculate the spending variances for March. 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, "U" for 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
Transcribed Image Text:jes 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 Activity Variances For the Month Ended March 31 Utilities Maintenance Supplies Indirect labor Depreciation Total 2. Calculate the spending variances for March. 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, "U" for 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
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