Problem 8-23A Flexible Budgets and Spending Variances [LO1 , LO2] You have just been hired by SecuriDoor 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 April:

Cost Formula Actual Cost in April

Utilities $ 16,600 plus $.13 per machine-hour $ 20,610

Maintenance $ 38,300 plus $1.70 per machine-hour $ 61,000

Supplies $ .90 per machine-hour $ 15,100

Indirect labor $ 94,400 plus $1.30 per machine-hour $ 117,400

Depreciation $ 68,400 $ 70,100

During April, the company worked 15,000 machine-hours and produced 9,000 units. The company had originally planned to work 17,000 machine-hours during April.

Required:

1. Prepare a flexible budget for April. (Input all amounts as positive values.)

SecuriDoor Corporation Flexible Budget

For the Month Ended April 30

Machine-hours

Utilities $

Maintenance

Supplies

Indirect labor

Depreciation

Total $

2. Prepare a report showing the spending variances for April. (Input all amounts as positive values. Leave no cells blank - be certain to enter "0" wherever required. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance).)

SecuriDoor Corporation Spending Variances

For the Month Ended April 30

Flexible Budget Actual Results Spending variance

Utilities $ $ $ F or U

Maintenance F or U

Supplies F or U

Indirect labor F or U

Depreciation F or U

Total $ $ $ F or U