You have just been hired by OpenDoor 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 April:

	Cost Formula	Actual Cost in April
Utilities	$17,200 plus $0.18 per machine-hour	$	22,180
Maintenance	$39,100 plus $2.40 per machine-hour	$	77,100
Supplies	$0.40 per machine-hour	$	7,000
Indirect labor	$94,700 plus $1.50 per machine-hour	$	123,300
Depreciation	$68,000	$	70,100

During April, the company worked 16,500 machine-hours and produced 11,500 units. The company had originally planned to work 18,500 machine-hours during April.

Required:

Prepare a flexible budget for April.

OpenDoor Corporation
Flexible Budget
For the Month Ended April 30
	Flexible Budget
Machine-hours
Utilities
Maintenance
Supplies
Indirect labor
Depreciation
Total

2.

Prepare a report showing the spending variances for April. (Input all amounts as positive values. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance).)

OpenDoor Corporation
Spending Variances
For the Month Ended April 30
	Flexible Budget	Actual Results	Spending Variances
Utilities
Maintenance
Supplies
Indirect labor
Depreciation
Total