Problem 9-18 (Algo) Activity and Spending Variances [LO9-1, 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 overhead costs." You find that the company has never used a flexible budget, and you suggest that preparing such a budget would bet 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: During March, the company worked 18,000 machine-hours and produced 12,000 units. The company had originally planned to work 20,000 machine-hours during March. Required: 1. Calculate the activity varlances for March. 2. Calculate the spending variances for 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. Calculate 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.) 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. Calculate the spending variances for March. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (1.e., zero variance). Input all amounts as positive values.) Case 9-25 (Algo) Critiquing a Report; Calculating Spending Variances [LO9-3, LO9-5] Boyne University offers an extensive continuing education program in many cities throughout the state. For the convenience of its faculty and administrative staff and to save costs, the university operates a motor pool. The motor pool's monthly planning budget is based on operating 18 vehicles; however, for the month of March the university purchased one additional vehicle. The motor pool furnishes gasoline, oll, and other supplies for its automobiles. A mechanic does routine maintenance and minor repairs. Major repairs are performed at a nearby commercial garage. The following cost control report shows actual operating costs for March of the current year compared to the planning budget for March. The planning budget was based on the following assumptions: a. $0.12 per mille for gasoline. b. $0.09 per mile for oil, minor repairs, and parts. The planning budgot was based on the following assumptions: a. $0.12 per mile for gasoline. b. $0.09 per mille for oil, minor repairs, and parts. c. $33 per automobile per month for outside repairs. d. $69 per automobile per month for insurance. e. $8,610 per month for salaries and benefits. f. $194 per automobile per month for depreciation. The supervisor of the motor pool is unhappy with the report, claiming it paints an unfair picture of the motor pool's performance. Required: 1. Calculate the spending variances for March. (Indiente the effect of each variance by selecting "F" for favorable. "U" for unfavorable, and "None" for no effect (L.e., zero varlance), Input all amounts as positive values.)
