Question

Can you show me how you came up with each answer?

Ch 9 HW Saved Help Save & Exit Submit Check my work 1 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. 10 points After much effort and analysis, you determined the following cost formulas and gathered the following actual cost data for March: eBook Print References Utilities Maintenance Supplies Indirect labor Depreciation Cost Formula $16,700 + $0.18 per machine-hour $38,900 + $1.70 per machine-hour $0.30 per machine-hour $94,800 + $1.70 per machine-hour $68, 200 Actual Cost in March $ 21,560 $ 61,600 $ 4,900 $124,600 $ 69,900 During March, the company worked 15,000 machine-hours and produced 9,000 units. The company had originally planned to work 17,000 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 Mc Graw Hill Education < Prev 1 of 2 Next >

Answer 1

1) The activity variances for March is as follows:

                                   FAB Corporation

                                  Activity Variances

                     For the month ended March 31

	Flexible Budget	Planning Budget	Activity Variances
Machine Hours (A)	15,000	17,000
	$	$	$
Utilities ($16,700 + ($0.18* A))	19,400	19,760	360 (F)
Maintenance (($38,900 + ($1.70* A))	64,400	67,800	3,400(F)
Supplies ($0.30* A)	4,500	5,100	600(F)
Indirect labor($94,800 + ($1.70* A))	120,300	123,700	3,400(F)
Depreciation	68,200	68,200	-
Total	$ 276,800	$284,560	$7,760(F)

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2) The spending variances for March is as follows:

                                   FAB Corporation

                                  Spending Variances

                     For the month ended March 31

	Flexible Budget	Actual Result	Spending Variances
Machine Hours (A)	15,000	15,000
	$	$	$
Utilities ($16,700 + ($0.18* A))	19,400	21,560	2,160 (U)
Maintenance (($38,900 + ($1.70* A))	64,400	61,600	2,800(F)
Supplies ($0.30* A)	4,500	4,900	400(U)
Indirect labor($94,800 + ($1.70* A))	120,300	124,600	4,300(U)
Depreciation	68,200	69,900	1,700(U)
Total	$ 276,800	$282,560	5,760(U)

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