Question: Hi- I need help on the following problem. (9-18) _______________ You have just been hired by FAB Corporation, the manufacturer of a revolutionary new garage
Hi- I need help on the following problem. (9-18)
_______________
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 in Cost Formula March Utilities $16, 200 + $0.17 per machine-hour $ 21, 570 Maintenance $38, 800 + $1. 40 per machine-hour $ 62, 000 Supplies $0 . 40 per machine-hour $ 8, 200 Indirect labor $94, 700 + $1. 40 per machine-hour $125 , 000 Depreciation $68, 300 $ 70 , 000Calculate 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.) Indirect labor Calculate the spending 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.) Indirect labor
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