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x E Connesct Connect https://newconnect.mheducation.com/fiow/connect ework Saved Help Save & Ch just béen hired by FAB Corporation, the manufacturer of a revolutionary new garage door opening device. The president has asked that ycu 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. h effort and analysis, you determined the folowing cost formulas and gathered the following actual cost data for March Actual Cost in March s 20,448 $ 70,800 s 11,80e $131,300 $ 69,788 ost Formula utilities Maintenance $16,800 plus $e.11 per machine-hour 538, 500 plus $1.6 pen machine-hour 50.50 per machine-hour Ind irect Labor 94,40 Plus $1.s0 per machine-hour Depreciation$63,000 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 complete this question by entering your answers in the tabs below. K Ptey 3 of 4 Next

Explanation / Answer

1) FAB Corporation

Activity Variances

For the Month Ended March 31 (Amounts in $)

2) FAB Corporation

Spending Variances

For the Month Ended March 31 (Amounts in $)

(3,000)

Particulars Planning Budget Flexible Budget Activity Variances Favorable/Unfavorable Machine Hours (h) 24,000 22,000 Utilities ($16,000+0.11h) 18,640 18,420 220 F Maintenance ($38,600+$1.60h) 77,000 73,800 3,200 F Supplies ($0.50h) 12,000 11,000 1,000 F Indirect Labor ($94,400+$1.50h) 130,400 127,400 3,000 F Depreciation ($68,000) 68,000 68,000 0 F Total 306,040 298,620 7,420 F

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