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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 $ 22,500 $ 60,700 $ 11,800 $ 123,000 $ 69,300 utilities Maintenance Supplies Indirect labor Depreciation Cost Formula $16,900 $0.19 per machine-hour $38,900 $1.40 per machine-hour $0.60 per machine-hour $94,900 $1.40 per machine-hour 167,600 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.

"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 $ 22,500 $ 60,700 $ 11,800 $ 123,000 $ 69,300 utilities Maintenance Supplies Indirect labor Depreciation Cost Formula $16,900 $0.19 per machine-hour $38,900 $1.40 per machine-hour $0.60 per machine-hour $94,900 $1.40 per machine-hour 167,600 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.

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 $16,900 $0.19 per machine-hour $38,900+ $1.40 per machine-hour $0.60 per machine-hour $94,900 $67,600 $1.40 per machine-hour 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. Required: 1. Prepare a flexible budget for March. 2. Prepare a report showing the spending variances for March Utilities Maintenance Supplies Indirect labor Depreciation Actual Cost in March $ 22,500 $ 60,700 $ 11,800 $ 123,800 $ 69,300 Complete this question by entering your answers in the tabs below. Required 1 Required 2 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 (.e., zero variance). Input all amounts as positive values.) FAB Corporation Spending Variances For the Month Ended March 311
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 $16,900 $0.19 per machine-hour $38,900+ $1.40 per machine-hour $0.60 per machine-hour $94,900 $67,600 $1.40 per machine-hour 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. Required: 1. Prepare a flexible budget for March. 2. Prepare a report showing the spending variances for March Utilities Maintenance Supplies Indirect labor Depreciation Actual Cost in March $ 22,500 $ 60,700 $ 11,800 $ 123,800 $ 69,300 Complete this question by entering your answers in the tabs below. Required 1 Required 2 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 (.e., zero variance). Input all amounts as positive values.) FAB Corporation Spending Variances For the Month Ended March 311
During March, the company worked 18,000 machine-hours and produced 12,000 units. The compa 20,000 machine-hours during March. Required: 1. Prepare a flexible budget for March. 2. Prepare a report showing the spending variances for March. Complete this question by entering your answers in the tabs below. Required 1 Prepare a flexible budget for March. (Input all amounts as positive values.) FAB Corporation Flexible Budget For the Month Ended March 31 Machine-hours Utilities Maintenance Supplies Indirect labor Depreciation Total Required 1 Required 2 Required: 1. Prepare a flexible budget for March. 2. Prepare a report showing the spending variances for March. Complete this question by entering your answers in the tabs below. Utilities Maintenance Supplies Indirect labor Depreciation Total < Required 1 Required 2 Prepare a report showing the spending variances for March. (Indate the effect of each varianc favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts FAB Corporation Spending Variances For the Month Ended March 31 Utilities Maintenance Supplies Indirect labor Depreciation Required 2 > < Required 1 You have just been hired by FAB Corporation, the manufacturer of a revolutionary new garag asked that you review the company's costing system and "do what you can to help us get be overhead costs." You find that the company has never used a flexible budget, and you sugge an excellent first step in overhead planning and control. After much effort and analysis, you determined the following cost formulas and gathered the 1 Cost Formula $16,900+ $0.19 per machine-hour $38,900+ $1.40 per machine-hour $0.60 per machine-hour $94,900+ $1.40 per machine-hour $67,600 Required 2> Required: 1. Prepare a flexible budget for March. 2. Prepare a report showing the spending variances for March. Actual Cost in March $ 22,500 $ 60,700 $ 11,800 $ 123,800 $ 69,300 During March, the company worked 18,000 machine-hours and produced 12,000 units. The cor 20,000 machine-hours during March.
Transcribed Image Text:During March, the company worked 18,000 machine-hours and produced 12,000 units. The compa 20,000 machine-hours during March. Required: 1. Prepare a flexible budget for March. 2. Prepare a report showing the spending variances for March. Complete this question by entering your answers in the tabs below. Required 1 Prepare a flexible budget for March. (Input all amounts as positive values.) FAB Corporation Flexible Budget For the Month Ended March 31 Machine-hours Utilities Maintenance Supplies Indirect labor Depreciation Total Required 1 Required 2 Required: 1. Prepare a flexible budget for March. 2. Prepare a report showing the spending variances for March. Complete this question by entering your answers in the tabs below. Utilities Maintenance Supplies Indirect labor Depreciation Total < Required 1 Required 2 Prepare a report showing the spending variances for March. (Indate the effect of each varianc favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts FAB Corporation Spending Variances For the Month Ended March 31 Utilities Maintenance Supplies Indirect labor Depreciation Required 2 > < Required 1 You have just been hired by FAB Corporation, the manufacturer of a revolutionary new garag asked that you review the company's costing system and "do what you can to help us get be overhead costs." You find that the company has never used a flexible budget, and you sugge an excellent first step in overhead planning and control. After much effort and analysis, you determined the following cost formulas and gathered the 1 Cost Formula $16,900+ $0.19 per machine-hour $38,900+ $1.40 per machine-hour $0.60 per machine-hour $94,900+ $1.40 per machine-hour $67,600 Required 2> Required: 1. Prepare a flexible budget for March. 2. Prepare a report showing the spending variances for March. Actual Cost in March $ 22,500 $ 60,700 $ 11,800 $ 123,800 $ 69,300 During March, the company worked 18,000 machine-hours and produced 12,000 units. The cor 20,000 machine-hours during March.
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