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 in March Utilities $16,200 + $0.20 per machine-hour. Actual Cost $22,800

Maintenance $39,000 + $1.60 per machine-hour Actual Cost $ 71,200

Supplies $0.70 per machine-hour. Actual Cost. $ 16,600

Indirect labor $94,400 + $1.10 per machine-hour Actual Cost $ 121,700

Depreciation $68,000 Actual Cost $ 69,700

During March, the company worked 22,000 machine-hours and produced 16,000 units. The company had originally planned to work 24,000 machine-hours during March.

Required:

1. Calculate the activity variances for March.

2. Calculate the spending variances for March.