A one-month budget allowance of factory overhead for the Fabrication Department of the Andromeda Company is as follows:
Activity Base: 1,800 machine hours per month at normal capacity, which is 90% of rated capacity

Actual production for February required 1,860 machine hours. Actual costs for February are as follow:

Required:
(1) Prepare a flexible budget for the Fabrication Department at the 80%, 90%, 100%, and 110% levels of the rated capacity. Assume that fixed costs are not expected to change between the 80% and 110% levels of capacity.
(2) Prepare a variance report for February, assuming factory overhead was charged to production at a predetermined rate for normal capacity (90% of rated capacity). The variance report should show the spending variance for each item of cost and a single idle capacity variance for the department.

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Variable Rate Per Machine Cost $ 2,000.00 Employee health plan S 20 $4.50 $18,000.00 $18,000.00 Fixed cost Variable cost (1,800 machine hours x $4.50 variable rate) Total cost at normal capacity $26,100.00 Factory overhead rate for Fabrication Department at normal capacity ($26,100/1,800 hours) $14.50 per machine hour Indirect labor. Supervision Factory supplies 6,125.00 2,000.00 2,154.00 1,420.50 Rework operations Payroll taxesu Repair and maintenance.... Property insurance. Property taxes Vacation pay. Employee pension costs 1,675.50 1,525.75 785.00 1,700.00 1,000.00 845.00 3,500.00 an. Building occupancy. General factory 900.00 1,385.00 $27,059.00 Total cost for August