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: Utilities Maintenance Supplies Indirect labor Depreciation Cost Formula $16,50e plus $8.15 per machine-hour $38,200 plus $2.00 per machine-hour $0.80 per machine-hour 594,400 plus $1.40 per machine-hour $67,800 Actual Cost in March $ 21,450 $ 24,000 $ 16,600 $ 124,700 $69.5ee During March, the company worked 19.000 machine-hours and produced 13,000 units. The company had originally planned to work 21,000 machine-hours during March Required: 1. Calculate the activity vartonces 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 activity variances for March. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.. zero variance). Input all amounts as positive values.) FAB Corporation Activity Variances For the Month Ended March 31 Utilities Maintenance Supples indirect labor Depreciation Total Required 2 >

please do required parts one and two thanks

Answer 1

Answer-1)-

FAB Corporation
Activity Variance for the month of March 31
Particulars	Planning Budget	Flexible Budget	Difference	Remark
	$	$	$
Utilities	$16500+(21000 machine hours*0.15 per hour)= $19650	$16500+(19000 machine hours*0.15 per hour)= $19350	300	Favorable
Maintenance	$38200+(21000 machine hours*2.00 per hour)= $80200	$38200+(19000 machine hours*2.00 per hour)= $76200	4000	Favorable
Supplies	21000 machine hours*0.80 per hour= $16800	19000 machine hours*0.80 per hour= $15200	1600	Favorable
Indirect Labor	$94400+(21000 machine hours*1.40 per hour)= $123800	$94400+(19000 machine hours*1.40 per hour)= $121000	2800	Favorable
Depreciation	67800	67800	0	None
Totals $	308250	299550	8700	Favorable

2)-

FAB Corporation
Spending variance for the month of March 31
Particulars	Flexible Budget	Actual	Difference	Remark
	$	$	$
Utilities	$16500+(19000 machine hours*0.15 per hour)= $19350	21450	-2100	Unfavorable
Maintenance	$38200+(19000 machine hours*2.00 per hour)= $76200	74000	2200	Favorable
Supplies	19000 machine hours*0.80 per hour= $15200	16600	-1400	Unfavorable
Indirect Labor	$94400+(19000 machine hours*1.40 per hour)= $121000	124700	-3700	Unfavorable
Depreciation	67800	69500	-1700	Unfavorable
Total	299550	306250	-6700	Unfavorable