C O ezto.mheducation.com/hm.tpx?-0.9726263269585976 1530809557513 value 10.00 po

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C O ezto.mheducation.com/hm.tpx?-0.9726263269585976 1530809557513 value 10.00 points Problem 9-19 Activity and Spending Variances [LO9-1, LO9-2, LO9-3] 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: Actual Cost Cost Formula in March $17,000 plus $0.16 per machine-hour $ 22,000 Maintenance $38,100 plus $1.20 per machine-hour 55,900 S 17,800 Indirect labor $94,800 plus $1.80 per machine-hour $131,700 $ 70,000 Utilities $0 90 per machine-hour Depreciation $68,300 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. Complete the report showing the activity 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 Activity Variances For the Month Ended March 31 Utilities Supplies Indirect labor Depreciation Total 0 O

Explanation / Answer

1) Activity variance :

2) Spending variance :

Utilities 320 F Maintenance 2400 F Supplies 1800 F Indirect labour 3600 F Depreciation 0 None Total 8120 F

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