Ronal Davis, superintendent of Mason Company Milling Department, is very happy with his performance report for the past month. The report follows:

Upon receiving a copy of the report, John Arnold, the production manager, commented, Ive been getting these reports for months now, and I still cant see how they help me assess efficiency and cost control in that department. I assume that the static budget for the month was 35,000 machine-hours, but the standard machine hours should only be 2 MH per unit. Even though the actual machine hours were 30,000 MHs, the department produced only 14,000 units during the month, and there is no information for costs related to standard machine hours. Why do all the variances turn up favourable? What I need is a flexible budget.

Required: Using the Excel sheet provided (Image below)

Prepare a new overhead performance report that will help Mr. Arnold assess efficiency and cost control in the milling department. Your report should account for the following: a) The budgeted variable cost per machine hour. b) The flexible budget based on 30,000 MHs. c) The flexible budget based on the standard machine hours allowed. d) The total variance, spending variance and efficiency variance.

Mason Company Overhead Performance Report - Milling Departinent Actual Budget Variance 30,000 35,000 Machine-hours Variable manufacturing overhead Indirect labour Utilities Supplies Mantenance Total variable manufacturing overhead Fixed manufacturing overhead: Maintenance Supervision Depreciation Total fixed mamfacturing overhead Total manufacturing overhead 19,700 50.800 12,600 24,900 108,000 21,000 59,500 14.000 28,000 122,500 1,300 8,700 1,400 3.100 14.500 F F F F F 52,000 110,000 80,000 242,000 350,000 52,000 110,000 80,000 242,000 364,500 14,500 F Mason Company Performance Report - Milling Department 35,000 30,000 Static budgeted machine-hours Actual machine-machine hours Standard machine-hours allowed: 1) Actual units produced 2) Machine-hours per unit Standard machine-hours Variances Spending IF Cost formula per MH Efficiency Flexible Budget 30,000 Standard MHS MHS Actual costs incurred Static Budget Total variance U/F variance variance $ 0.60 $ 19,700 $ 21,000 $ . $ (19,700) $ (19,700) $ . Overhead costs Variable costs: Indirect labour Utilities Supplies Maintenance Total variable cost $ 0.60 $ 19,700 $ 21,000 $ - $ - $ (19,700) $ (19,700) $ Fixed costs: Maintenance Supervision Depreciation Total fixed cost Total overhead costs $ - $ $ 19,700 $ 21,000 $ - $ - $ (19,700)