2. HiFlux Co. manufactures a control valve used in sophisticated machinery. The firm uses a standard costing system and its overhead application rate is based on machine hours. The planned output for the year 201x is 72,000 units requiring 360,000 machine hours. The company is able to schedule production uniformly throughout the year. It turns out that a total of 6,600 valves requiring 31,500 machine hours were actually produced in March 201x. Appended below is a performance report on factory overhead and other production data prepared by the firm's new accounts assistant Soo Mes Sih for March 201x: Performance Report on Factory Overhead for March 201x: Actual Monthly Flexible Cost incurred Budget at Budget at in March 30,000 36,000 Variances Indirect materials 11,100 10,200 12,240 900 C Indirect labor 8,400 7,500 9,000 900 U Maintenance 5,560 5,100 6,120 460 n C Supervision 5,250 5,400 5,400 150 Utilities 5,400 4,500 4,500 900 U Depreciation 8,400 8,400 8,400 0 U: Unfavourable; F: Favourable Other production Data: Planned yearly production 72,000 units Planned yearly machine hours required 360,000 machine hours Actual production in March 6,600 units Actual machine hours used 31,500 hours Upon receiving the report, the company CEO commented: "Although the figures in the report looks like they were calculated correctly, the production supervisors suspect that the reported variances might not accurately reflect the company's operations." Required: (i) Prepare a revised performance report on factory overhead that would more accurately evaluate the control of overhead costs in March, by filling the shaded cells in the template provided. (ii) Prepare an analysis of variable overhead variances by filling the shaded cells in the template provided. (iii) Prepare an analysis of fixed overhead variances by filling the shaded cells.(iv) Prepare journal entries (narrations are not necessary) to record the following: [1) The incurrence of factory overhead (in total) in March 201x. (2) The application of factory overhead (in total) to work in process inventory in March 201x. (3) Factory overhead variances. (i) Revised Performance Report for March 201x Actual Flexible Cost incurred Budget Overhead in March Variances Variable Overhead: Total Variable Overhead Fixed Overhead: Total Fixed Overhead Total Factory Overhead * Indicate F for favorable or U for unfavorable variance(ii) Analysis of Variable Overhead Variances: 2 ACC210: Accounting for Decision Making and Control Jan 2022 Semester Actual Variable Overhead Budgeted Variable Overhead based on actual machine hours Flexible Budget based on standard machine hours allowed Spending Variance Efficiency Variance *Indicate F for favorable or U for unfavorable variance (iii) Analysis of Fixed Overhead Variances: Actual Fixed Overhead Budgeted Fixed Overhead Fixed Overhead Applied Budget Variance Volume Variance *Indicate F for favorable or U for unfavorable variance