FAB Corporation
Activity Variances
For the Month Ended March 31
Utilities
Maintenance
Supplies
Inderect Labor
Depreciation
Total

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 companys 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:

Cost Formula Actual Cost in March

Utilities $16,300 plus $0.16 per machine-hour $ 21,780

Maintenance $38,300 plus $1.20 per machine-hour $59,700

Supplies $0.70 per machine-hour $15,900

Indirect labor $94,400 plus $1.70 per machine-hour $134,400

Depreciation $67,700 $69,400

During March, the company worked 21,000 machine-hours and produced 15,000 units. The company had originally planned to work 23,000 machine-hours during March.

Required:

1. Complete the report showing 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.e., zero variance). Input all amounts as positive values.)

FAB Corporation
Activity Variances
For the Month Ended March 31
Utilities
Maintenance
Supplies
Indirect Labor
Depreciation
Total

2. Complete the report showing the spending variances for March. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.)

FAB Corporation
Spending Variances
For the Month Ended Mrch 31
Utilities
Maintenance
Supplies
Indirect Labor
Depreciation
Total