You have just been hired by FAB Corporation, the manufacturer of a revolutionary

Question

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 $ 8,400 Cost Formula $20,600 plus $0.10 per machine-hour $40,000 plus $1.60 per machine-hour $0.30 per machine-hour $130,000 plus $0.70 per machine-hour $70,000 2 Utilities Supplies Indirect l 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 Required:

Explanation / Answer

Budget :

Actual cost Revenue and spending variance Fleixble budget Activity variance Statice budget Machine hours 26000 26000 30000 Utilities 24200 1000 U 23200 400 F 23600 Maintenance 78100 3500 F 81600 6400 F 88000 Supplies 8400 600 U 7800 1200 F 9000 Indirect labour 149600 1400 U 148200 2800 F 151000 Depreciation 71500 1500 U 70000 None 70000 Total 331800 1000 U 330800 10800 F 341600

Related Questions

Navigate

• Browse (All)
• Browse Y
• Subjects

---

---

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