You have just been hired by FAB Company, the manufacturer of a revolutionary new garage door opening device John Foster, 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 are able to determine the following cost formulas for the company's normal operating range of 10,000 to 20,000 units each month Overhead Costs utilities Maintenance Machine setup Indirect labour Depreciation Cost Formula $ 1.20 per machine-hour $ 1.50 per machine-hour plus 549.000 per month $ 0.75 per machine-hour $ 1.15 per machine-hour plus 5139,000 per month $79.000 per month To show the president how the flexible budget concept works, you have gathered the following actual cost data for the most recent month, March, in which the company produced 13,000 units utilities Haintenance Machine setup Indirect labour Depreciation Total cost $ 32,450 92.000 19,950 170,700 $994,550 The only variance in the fixed costs for the month was with depreciation, which increased as a result of a purchase of new equipment The company had originally planned to work 16.000 units during March using the standard quantity of 32.000 machine hours You have just been hired by FAB Company, the manufacturer of a revolutionary new garage door opening device John Foster, 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 are able to determine the following cost formulas for the company's normal operating range of 10,000 to 20,000 units each month: Overhead Costs Utilities Haintenance Machine setup Indirect labour Depreciation Cost Formula $ 1.20 per machine-hour $ 1.50 per machine-hour plus $49,000 per month 50.75 per machine-hour $ 1.15 per machine-hour plus 5139,000 per month $79,000 per month To show the president how the flexible budget concept works, you have gathered the following actual cost data for the most recent month, March, in which the company produced 13,000 units Utilities Maintenance Machine setup Indirect labour Depreciation Total cost 92,000 19.950 170,700 79.450 3394,550 The only variance in the fixed costs for the month was with depreciation which increased as a result of a purchase of new equipment The company had originally planned to work 16,000 units during March using the standard quantity of 32.000 machine-hours To show the president how the flexible budget concept works, you have gathered the following actual cost data for the most recent month, March, in which the company produced 13,000 units Utilities Maintenance Machine setup Indirect labour Depreciation Total cost $ 32,450 92,000 19,950 179,700 79,450 $394,550 The only variance in the fixed costs for the month was with depreciation, which increased as a result of a purchase of new equipment The company had originally planned to work 16,000 units during March using the standard quantity of 32,000 machine hours 1. Prepare flexible budgets for the company in increments of 2,500 units from 10,000 units to 15,000 units. (Roun Formula" answers to 2 decimal places.) FAB COMPANY Flexible Budget For the Month Ended March 31 Cost Formula (per Machine 10000 Units 12500 Units Hour) Overhead Costs 15000 Units Machine hours Variable costs: $ 0.00 S 0 $ 0 0 Total variable costs Fixed costs 0 05 0 $ Total fixed costs Total overhead cost 0 $ 0 $ 0 5 2. Prepare a flexible budget overhead performance report for the company for March (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effectie., zero variance). Round "Cost formule" answers decimal places.) FAB COMPANY Overhead Performance Report For the Month Ended March 31 Actual Spending or Budget Flexible Variance Budget Activity - Level (Machine Hours) 26000 26000 Static Budget Cost Formula (per Machine Hour) 30000 Variable overhead costs Total variable overhead costs Fixed overhead costs Total fixed overhead costs FAB COMPANY Overhead Performance Report For the Month Ended March 31 Actual Spending or Budget Flexible Variance Budget Activity - Level (Machine-Hours) 26000 26000 Static Budget Cost Formula (per Machine Hour) 30000 Variable overhead costs Total variable overhead costs Fixed overhead costs Total fixed overhead costs Total overhead cost FAB COMPANY Overhead Performance Report For the Month Ended March 31 Actual Spending or Budget Flexible Variance Budget Activity - Level (Machine-Hours) 26000 26000 Static Budget Cost Formula (per Machine Hour) 30000 Variable overhead costs Total variable overhead costs Fixed overhead costs Total fixed overhead costs Total overhead cost