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 $ 21,540 $ 52,900 $ 15,000 Utilities. Maintenance Supplies Indirect labor Depreciation Cost Formula $16,700+ $0.16 per machine-hour $38,200+ $1.10 per machine-hour $0.80 per machine-hour $94,200+ $1.40 per machine-hour $68, 200 $ 121,700 $ 69,900 During March, the company worked 17,000 machine-hours and produced 11,000 units. The company had originally planned to work 19,000 machine-hours during March. Required: 1. Prepare a flexible budget for March. 2. Prepare a report showing the spending variances for 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 $ 21,540 $ 52,900 $ 15,000 Utilities. Maintenance Supplies Indirect labor Depreciation Cost Formula $16,700+ $0.16 per machine-hour $38,200+ $1.10 per machine-hour $0.80 per machine-hour $94,200+ $1.40 per machine-hour $68, 200 $ 121,700 $ 69,900 During March, the company worked 17,000 machine-hours and produced 11,000 units. The company had originally planned to work 19,000 machine-hours during March. Required: 1. Prepare a flexible budget for March. 2. Prepare a report showing the spending variances for March.

Name: You have just been hired by FAB Corporation, the manufacturer of a re
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Description: You have just been hired by FAB Corporation, the manufacturer of a revolutionary new garage door opening device. The president hasasked that you review the company's costing system and "do what you can to help us get better control of our manufactur

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: Cost Formula Utilities $16,200 + $0.21 per machine-hour Maintenance $38,900 + $1.20 per machine-hour Supplies $0.80 per machine-hour Indirect labor $94,300 + $1.30 per machine-hour Depreciation $67,500 Actual Cost in March $ 21,990 $ 55,500 $ 15,000 $ 119,900 $ 69,200 During March, the company worked 17,000 machine-hours and produced 11,000 units. The company had originally planned to work 19,000 machine-hours during March.…
The head of production at your manufacturing facility said, “Our manufacturing processes are doing great. All our variances for materials, labor, and overhead are favorable. Actual costs for all our products are far below standard costs. We are killing it!” You, as company controller, just shake your head and think of how your respond to the head of production. What would you say?
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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 $ 22,570 $ 76,400 $ 20,500 $ 125,600 $ 69,700 Utilities Maintenance Supplies Indirect labor Depreciation Cost Formula $16,400 + $0.19 per machine-hour $38,900+ $1.90 per machine-hour $0.90 per machine-hour $94,800+ $1.30 per machine-hour $68,000 During March, the company worked 21,000 machine-hours and produced 15,000 units. The company had originally planned to work 23,000 machine-hours during March.…
You have just been hired by FAB Corporation, the manufacturer of a revolutionary new garage door opening device. The president 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 Supplies Indirect labor Depreciation Cost Formula $16,700 + $0.20 per machine-hour $38,100 + $1.30 per machine-hour $0.30 per machine-hour $94,500+ $1.60 per machine-hour $68,300 Actual Cost in March $ 23,500 $ 64,400 $ 7,300 $ 135,400 $ 70,000 During March, the company worked 23,000 machine-hours and produced 17,000 units. The company originally planned to work 25,000 machine-hours during March. Required: 1. Calculate…
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 Supplies Indirect labor Depreciation Cost Formula $16,400 + $0.19 per machine-hour $38,100 +$1.60 per machine-hour $0.60 per machine-hour $94,400 +$1.60 per machine-hour $67,600 Actual Cost in March $ 21,810 $ 62,300 $ 11,200 $ 125,700 $ 69,300 During March, the company worked 17,000 machine-hours and produced 11,000 units. The company originally planned to work 19,000 machine-hours during March. Required: 1. Calculate…
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 $ 22,180 $ 75,300 $ 16,600 $ 131,000 $ 69,200 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. Cost Formula $16,300 + $0.17 per machine-hour $38,300+ $1.80 per machine-hour $0.70 per machine-hour Required: 1. Prepare a flexible budget…
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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 $ 24,200 $ 78,100 Utilities Maintenance Supplies Indirect labor Depreciation Cost Formula $20,600 + $0.10 per machine-hour $40,000 +$1.60 per machine-hour $0.30 per machine-hour $130,000 + $0.70 per machine-hour $70,000 $ 8,400 $ 149,600 $ 71,500 During March, the company worked 26,000 machine-hours and produced 15,000 units. The company had originally planned to work 30,000 machine-hours during March.…
Tim Johnson is a news reporter and feature writer for The Wall Street Review, an important daily newspaper for financial managers. Tim’s assignment is to develop two feature articles: one on life-cycle costing and one on business analytics, including interviews with chief financial officers and operating managers. Tim has a generous travel budget for research into company history, operations, and market analysis for the firms he selects for the article. Tim has asked you to recommend industries and firms that would be good candidates for the article. What would you advise? Explain your recommendations.