r of a revolutionary new garage door opening You have just been hired by FAB Cor

Question

r of a revolutionary new garage door opening You have just been hired by FAB Corporation, the 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 excel lent 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 Cost Formula Utilities Supplies 0.80 per machine-hour Depreciation $8,300 in March $16,900 plus $0.20 per machine-hour S 21,900 Maintenance $38,000 plus $2.10 per machine-hour 85,400 S 12,800 Indirect labor $94,500 plus $1.80 per machine-hour 124,200 70,000 During March, the company worked 14,000 machine-hours and produced 8,000 units. The company had originally planned to work 16,000 machine-hours during March. Required 1. Complete the report showing 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 C Activity Variances For the Month Ended March 31 Utilities Supplies Indirect labor Total 2. Complete the report showing the spending variances for March. (ndicate 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 C Spending Variances For the Month Ended March 31 Utilities Supplies Indirect labor

Explanation / Answer

1 Flexible budget Planning budget Activity variances Utilities 19700 20100 400 F Maintenance 67400 71600 4200 F Supplies 11200 12800 1600 F Indirect labor 119700 123300 3600 F Depreciation 68300 68300 0 None Total 286300 296100 9800 F 2 Flexible budget Actual results Spending variances Utilities 19700 21900 2200 U Maintenance 67400 65400 2000 F Supplies 11200 12600 1400 U Indirect labor 119700 124200 4500 U Depreciation 68300 70000 1700 U Total 286300 294100 7800 U

Related Questions

Navigate

• Browse (All)
• Browse R
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.