Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

You have just been hired by FAB Corporation, the manufacturer of a revolutionary new garage door opening device. The president asked you to review the

You have just been hired by FAB Corporation, the manufacturer of a revolutionary new garage door opening device. The president asked you to review the companys costing system and do what you can to help us get better control of our manufacturing overhead costs. You find the company has never used a flexible budget, and you suggest preparing such a budget would be an excellent first step in overhead planning and control.
After much effort and analysis, you estimated the following cost formulas and gathered the following actual cost data for March:
Cost Formula Actual Cost in March
Utilities $16,800+ $0.17 per machine-hour $ 22,510
Maintenance $38,200+ $1.60 per machine-hour $ 68,800
Supplies $0.50 per machine-hour $ 11,300
Indirect labor $94,800+ $1.50 per machine-hour $ 130,200
Depreciation $68,200 $ 69,900
During March, the company worked 21,000 machine-hours and produced 15,000 units. The company originally planned to work 23,000 machine-hours during March.
Required:
Calculate the activity variances for March.
Calculate the spending variances for March.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Operational Auditing Principles And Techniques For A Changing World

Authors: Hernan Murdock

2nd Edition

1000388247, 9781000388244

More Books

Students also viewed these Accounting questions