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You have just been asked that you revie overhead costs." Yo an excellent first ste After much effort an Utilities Maintenance Supplies Indirect labor Depreciation During March, the c 21,000 machine-hou Required: 1. Prepare a flexible 2. Prepare a report Complete this qu Required 1 Req

You have just been asked that you revie overhead costs." Yo an excellent first ste After much effort an Utilities Maintenance Supplies Indirect labor Depreciation During March, the c 21,000 machine-hou Required: 1. Prepare a flexible 2. Prepare a report Complete this qu Required 1 Req

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 $ 76,200 $ 14,500 Utilities Maintenance Supplies Indirect labor Depreciation Cost Formula $16,900 + $0.16 per machine-hour $38,300+ $2.10 per machine-hour $0.70 per machine-hour $94,900 + $1.40 per machine-hour $67,600 $ 125,200 $ 69,300 During March, the company worked 19,000 machine-hours and produced 13,000 units. The company had originally planned to work 21,000 machine-hours during March. Required: 1. Prepare a flexible budget for March. 2. Prepare a report showing the spending variances for March. A Complete this question by entering your answers in the tabs below. 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 $ 76,200 $ 14,500 Utilities Maintenance Supplies Indirect labor Depreciation Cost Formula $16,900 + $0.16 per machine-hour $38,300+ $2.10 per machine-hour $0.70 per machine-hour $94,900 + $1.40 per machine-hour $67,600 $ 125,200 $ 69,300 During March, the company worked 19,000 machine-hours and produced 13,000 units. The company had originally planned to work 21,000 machine-hours during March. Required: 1. Prepare a flexible budget for March. 2. Prepare a report showing the spending variances for March. A Complete this question by entering your answers in the tabs below. Required 1 Required 2
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