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:
| Cost Formula | Actual Cost in March | ||
| Utilities | $16,100 + $0.19 per machine-hour | $ | 21,510 |
| Maintenance | $38,600 + $1.70 per machine-hour | $ | 64,700 |
| Supplies | $0.40 per machine-hour | $ | 7,400 |
| Indirect labor | $94,800 + $1.20 per machine-hour | $ | 118,500 |
| Depreciation | $67,800 | $ | 69,500 |
During March, the company worked 17,000 machine-hours and produced 11,000 units. The company had originally planned to work 19,000 machine-hours during March.
Required:
1. Prepare a flexible budget for March.
2. Prepare a report showing the spending variances for March.
In: Accounting
ou 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:
| Cost Formula | Actual Cost in March | ||
| Utilities | $16,700 plus $0.16 per machine-hour | $ | 21,220 |
| Maintenance | $38,500 plus $2.10 per machine-hour | $ | 68,000 |
| Supplies | $0.40 per machine-hour | $ | 6,600 |
| Indirect labor | $94,200 plus $2.00 per machine-hour | $ | 129,100 |
| Depreciation | $67,600 | $ | 69,300 |
During March, the company worked 15,000 machine-hours and produced 9,000 units. The company had originally planned to work 17,000 machine-hours during March.
Required:
1. Calculate the activity variances for March.
2. Calculate the spending variances for March.
In: Accounting
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:
| Cost Formula | Actual Cost in March | ||
| Utilities | $16,800 plus $0.21 per machine-hour | $ | 23,640 |
| Maintenance | $38,600 plus $1.90 per machine-hour | $ | 78,000 |
| Supplies | $0.70 per machine-hour | $ | 16,600 |
| Indirect labor | $94,100 plus $1.30 per machine-hour | $ | 126,200 |
| Depreciation | $67,700 | $ | 69,400 |
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.
In: Accounting
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:
| Cost Formula | Actual Cost in March | ||
| Utilities | $16,300 plus $0.16 per machine-hour | $ | 20,980 |
| Maintenance | $38,200 plus $1.50 per machine-hour | $ | 59,000 |
| Supplies | $0.80 per machine-hour | $ | 14,200 |
| Indirect labor | $94,100 plus $2.10 per machine-hour | $ | 132,800 |
| Depreciation | $68,400 | $ | 70,100 |
During March, the company worked 16,000 machine-hours and produced 10,000 units. The company had originally planned to work 18,000 machine-hours during March.
1. Calculate the activity variances for March.
2. Calculate the spending variances for March.
In: Accounting
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:
| Cost Formula | Actual Cost in March | ||
| Utilities | $16,600 + $0.19 per machine-hour | $ | 21,630 |
| Maintenance | $38,500 + $1.60 per machine-hour | $ | 59,500 |
| Supplies | $0.40 per machine-hour | $ | 6,600 |
| Indirect labor | $94,800 + $1.40 per machine-hour | $ | 119,500 |
| Depreciation | $68,300 | $ | 70,000 |
During March, the company worked 15,000 machine-hours and produced 9,000 units. The company had originally planned to work 17,000 machine-hours during March.
Required:
1. Calculate the activity variances for March.
2. Calculate the spending variances for March.
In: Accounting
Item 3
Item 3
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:
| Cost Formula | Actual Cost in March | ||
| Utilities | $16,300 plus $0.11 per machine-hour | $ | 19,860 |
| Maintenance | $38,800 plus $1.80 per machine-hour | $ | 61,400 |
| Supplies | $0.60 per machine-hour | $ | 9,400 |
| Indirect labor | $94,800 plus $1.80 per machine-hour | $ | 124,500 |
| Depreciation | $67,600 | $ | 69,300 |
During March, the company worked 14,000 machine-hours and produced 8,000 units. The company had originally planned to work 16,000 machine-hours during March.
Required:
1. Calculate the activity variances for March.
2. Calculate the spending variances for March.
In: Accounting
| FAB Corporation is 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: | ||
| Cost Formula | Actual Cost in March | |
| Utilities | $16,500 + $0.16 per machine-hour | $21,660 |
| Maintenance | $39,000 + $1.20 per machine-hour | $58,000 |
| Supplies | $0.80 per machine-hour | $16,600 |
| Indirect labor | $94,800 + $1.30 per machine-hour | $123,000 |
| Depreciation | $68,100 | $69,800 |
| During March, the company worked 19,000 machine-hours and produced 13,000 units. The company had originally planned to work 21,000 machine-hours during March. | ||
| Required: Complete the flexible budget performance report that shows both spending variances and activity variances for the FAB Corporation. Label all variances as Favorable (F) or Unfavorable (U) or None. | ||
In: Accounting
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:
| Cost Formula | Actual Cost in March | ||
| Utilities | $16,000 + $0.17 per machine-hour | $ | 20,860 |
| Maintenance | $38,500 + $1.30 per machine-hour | $ | 55,700 |
| Supplies | $0.60 per machine-hour | $ | 10,600 |
| Indirect labor | $94,300 + $1.50 per machine-hour | $ | 122,200 |
| Depreciation | $67,700 | $ | 69,400 |
During March, the company worked 16,000 machine-hours and produced 10,000 units. The company had originally planned to work 18,000 machine-hours during March.
Required:
1. Calculate the activity variances for March.
2. Calculate the spending variances for March
In: Accounting
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:
| Cost Formula | Actual Cost in March | ||
| Utilities | $16,800 + $0.16 per machine-hour | $ | 22,280 |
| Maintenance | $38,000 + $1.40 per machine-hour | $ | 64,000 |
| Supplies | $0.60 per machine-hour | $ | 13,600 |
| Indirect labor | $94,800 + $1.20 per machine-hour | $ | 123,300 |
| Depreciation | $67,700 | $ | 69,400 |
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.
In: Accounting
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:
| Cost Formula | Actual Cost in March | ||
| Utilities | $16,400 + $0.11 per machine-hour | $ | 20,070 |
| Maintenance | $38,900 + $1.50 per machine-hour | $ | 58,200 |
| Supplies | $0.50 per machine-hour | $ | 8,300 |
| Indirect labor | $94,900 + $1.60 per machine-hour | $ | 123,000 |
| Depreciation | $68,400 | $ | 70,100 |
During March, the company worked 15,000 machine-hours and produced 9,000 units. The company had originally planned to work 17,000 machine-hours during March.
Required:
1. Calculate the activity variances for March.
2. Calculate the spending variances for March.
In: Accounting