Question

Chapter 9 Homework problems You have just been hered by FAB Corporation, the manufacturer of a revolutionary new garage door opening device. The president has asked that you rew 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 Alter much effort and analysis, you determined the following cost formulas and gathered the following actual cost data for March Cost in Maintenance Supplies Indirect labor Depreciation $66,20 517. $ Sa. F . $68,00 cost Forma Se per chine hour .$1.70 per machine hour achine $1.00 per machine hour $131,500 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 Calculate the activity variances for March 2. Calculate the spending variances for March Complete this question by entering your answers in the tabs below. Required 1 Required 2 Calculate the spending variances for March (indicate the effect of each variance by selecting for favorable, "U" for unfavorable and one for no effect threre variance). Input all amounts as positive values.) FAB Corporation Spending Variances For the Month Ended March 31

Answer 1

solution: 2) Calculating the spending variances for March? FAB Corporation . spending variances For the Month Ended March 3? Flexible actual spending Budget Budget variances a) Machine Hours . .. 18.000 18.000 b) Utilities ($17,000+ $0.20 (0) $20,000 $22,000 $1,400 c) Maintenance (839100 +511.70(0)) $69.000 $66,300 $2.800 F d) Supplies (so.no (a)) $ 7,200 $ 17,800 $ 6000 e) Indirect Labor ($94.600+$1.80(a)). $127,000 $131,500 $4,500 V B) Depreciation 1868,200) $ 69,200 $69.900 $ 1,700 U g) Total (btctdte +f) $292,000 $297,400 $5,400

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