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, 200 $ 78, 300 $ 16,600 $ 128,6e0 $ 70,1e0 Cost Formula Utilities $16,80e + $e.15 per machine-hour $38,900 + $1.90 per machine-hour se.70 per machine-hour $94,100 + $1.40 per machine-hour $68, 400 Maintenance Supplies Indirect labor Depreciation During March, the company worked 22,000 machine-hours and produced 16,000 units. The company had originally planned to work 24,000 machine-hours during March. Required: 1. Calculate the activity varlances for March. 2 Calculate the spending varlances 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 < Required 1 Required 2 > 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 < 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 $ 22, 200 $ 78, 300 $ 16,600 $ 128,6e0 $ 70,1e0 Cost Formula Utilities $16,80e + $e.15 per machine-hour $38,900 + $1.90 per machine-hour se.70 per machine-hour $94,100 + $1.40 per machine-hour $68, 400 Maintenance Supplies Indirect labor Depreciation During March, the company worked 22,000 machine-hours and produced 16,000 units. The company had originally planned to work 24,000 machine-hours during March. Required: 1. Calculate the activity varlances for March. 2 Calculate the spending varlances 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 < Required 1 Required 2 > 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 < Required 1 Required 2
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
Question
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, 200
$ 78, 300
$ 16,600
$ 128,600
$ 70,100
Cost Formula
$16,800 + $0.15 per machine-hour
$38,900 + $1.98 per machine-hour
$0.70 per machine-hour
$94,100 + $1.40 per machine-hour
$68,400
Utilities
Maintenance
Supplies
Indirect labor
Depreciation
During March, the company worked 22,000 machine-hours and produced 16,000 units. The company had originally planned to work
24,000 machine-hours during March.
Required:
1. Calculate the activity varlances for March.
2 Calculate the spending varlances 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
Required 1
Required 2 >
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
Required 1
Required 2>
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