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 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 March:

	Cost Formula	Actual Cost in March
Utilities	$16,900 + $0.14 per machine-hour	$ 21,500
Maintenance	$38,500 + $1.20 per machine-hour	$ 56,300
Supplies	$0.80 per machine-hour	$ 15,800
Indirect labor	$95,000 + $2.10 per machine-hour	$ 137,900
Depreciation	$67,900	$ 69,600

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. Prepare a flexible budget for March.

2. Prepare a report showing the spending variances for March.

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

FAB Corporation
Flexible Budget
For the Month Ended March 31
Machine-hours	18,000 selected answer correct
Utilities	$300selected answer incorrect
Maintenance	3,000selected answer incorrect
Supplies	1,600selected answer incorrect
Indirect labor	2,800selected answer incorrect
Depreciation	0selected answer incorrect
Total	$7,700selected answer incorrect

Prepare a report showing the spending 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.)

FAB Corporation
Spending Variances
For the Month Ended March 31
Utilities	$2,100 selected answer incorrect	U selected answer correct
Maintenance	3,200 selected answer incorrect	F selected answer correct
Supplies	1,400 selected answer correct	U selected answer correct
Indirect labor	3,700 selected answer incorrect	U selected answer correct
Depreciation	1,700 selected answer correct	U selected answer correct
Total	$5,700 selected answer incorrect	U selected answer correct