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 + $0.15 per machine-hour	$	21,700
Maintenance	$38,600 + $1.80 per machine-hour	$	68,400
Supplies	$0.60 per machine-hour	$	11,800
Indirect labor	$94,000 + $1.90 per machine-hour	$	132,900
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.

Complete this question by entering your answers in the tabs below.

• Required 1
• Required 2

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

FAB Corporation
Flexible Budget
For the Month Ended March 31
Machine-hours
Utilities
Maintenance
Supplies
Indirect labor
Depreciation
Total

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
Maintenance
Supplies
Indirect labor
Depreciation
Total