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 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: Actual Cost in March $ 21,580 Cost Formula $16, 100 + $0.16 per Utilities machine-hour $38,200 + $1.90 per Maintenance machine-hour Supplies $0.70 per machine-hour Indirect $94,400 + $2.00 per labor machine-hour Depreciation $68,500 $ 75,700 $ 15,900 $141,300 $ 70,200 During March, the company worked 21,000 machine-hours and produced 15,000 units. The company had originally planned to work 23,000 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 1 2 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.) Show less FAB Corporation Activity Variances For the Month Ended March 31 Utilities Maintenance Supplies Indirect labor Depreciation Total Required Required 1 2 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 (i.e., zero variance). Input all amounts as positive values.) Show less FAB Corporation Spending Variances For the Month Ended March 31 Utilities Maintenance Supplies Indirect labor Depreciation Total The St. Lucia Blood Bank, a private charity partly supported by government grants, is located on the Caribbean island of St. Lucia. The blood bank has just finished its operations for September, which was a very busy month due to a powerful hurricane that hit neighboring islands causing many injuries. The hurricane largely bypassed St. Lucia, but residents of St. Lucia willingly donated their blood to help people on other islands. As a consequence, the blood bank collected and processed over 20% more blood than had been originally planned for the month. A report prepared by a government official comparing actual costs to budgeted costs for the blood bank appears below. Continued support from the government depends on the blood bank's ability to demonstrate control over its costs. St. Lucia Blood Bank Cost Control Report For the Month Ended September 30 Actual Planning Results Budget Variances Liters of blood 620 500 collected Medical supplies $10,350 $ 8,500 $1,850 U Lab tests 6,235 6,000 235 U Equipment depreciation 3,955 3,600 355 U Rent 1,550 1,550 0 Utilities 775 92 U Administration 12,595 12,050 545 U Total expense $35,552 $32,475 $3,077 U 867 The managing director of the blood bank was very unhappy with this report, claiming that his costs were higher than expected due to the emergency on the neighboring islands. He also pointed out that the additional costs had been fully covered by payments from grateful recipients on the other islands. The government official who prepared the report countered that all of the figures had been submitted by the blood bank to the government; he was just pointing out that actual costs were a lot higher than promised in the budget. The following cost formulas were used to construct the planning budget: Medical supplies Lab tests Equipment depreciation Rent Utilities Administration Cost Formulas $17.000 $12.000 $3,600 $1,550 $775 $10,550 + $3.000 Required: 1. Complete the flexible budget performance report for September. (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.) St. Lucia Blood Bank Flexible Budget Performance Report For the Month Ended September 30 Actual Flexible Results Budget Planning Budget 500 Liters of blood collected 620 $ 8,500 $ 10,350 6,235 Medical supplies Lab tests Equipment depreciation Rent Utilities Administration 3,955 1,550 867 12,595 $ 35,552 6,000 3,600 1,550 775 12,050 $32,475 Total expense