Problem 9-18 (Algo) Activity and Spending Variances (L09-1, LO9-2, LO9-3) 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 overheed 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 Molntenance Supplies Indirect labor Depreciation Cost Formula $16,100 + $0.13 per machine-hour $38,900 $1.50 per machine-hour $0.60 per machine-hour 394,900 + $1.20 per machine hour 568,500 Actual Cost In March $ 20,760 5.72.300 $ 13,000 5122,200 $ 70,200 During March, the company worked 20,000 machine hours and produced 14,000 units. The company had originally planned to work 22.000 machine hours during March Required: 1. Calculate the activity variances for March 2. Calculate the spending variances for March Complete this question by entering your answers in the tabs below. Required: Hequired 2 Calculate the activity variance for March (Indicate the effect of each Variance by electing for favorable, u" for unfavorable and for no effect were variance) Total amounts ouve votes) FAB Corporation Activity Valances For the Month Ended March 31 Maintenance Supplies 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 $16,100 + $0.13 per machine-hour $38,900 + $1.80 per machine-hour $0.68 per machine-hour $94,900 + $1.20 per machine-hour 563,500 Actual Cost in March 5 20.750 $ 72,300 $ 13,000 $122,200 $ 70,200 During March the company worked 20,000 machine hours and produced 14,000 units. The company had originally planned to work 22,000 machine hours during March Required: 1 Calculate the activity variances for March 2. Calculate the spending variances for March Complete this question by entering your answers in the tabs below. Required: Required 2 Calculate the activity variances for March (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "hions for no effect ( 200 varianco)Input all amounts as positive valuon.) FAB Coporation Activity Variances For the Month Endod March 31 Utiles Maintenance Supplies Indirect labor Depreciation Total Required 2 >
