Prepare the planning budget for March

Prepare the flexible budget at the end of March

Calculate activity variances

Calculate spending variances

PROBLEM 9-20 Activity and Spending Variances LO9-19, L09-20, 109-3Q 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: Cost Formula Utilities $20,600 + $0.10 per machine-hour Maintenance $40,000 + $1.60 per machine-hour Supplies $0.30 per machine-hour Indirect labor $130,000 + $0.70 per machine-hour Depreciation $70,000 Actual Cost in March $24,200 $ 78,100 $8,400 $149,600 $ 71,500 During March, the company worked 26,000 machine-hours and produced 15,000 units. The company had originally planned to work 30,000 machine-hours during March