PROBLEM 9-18 Activity and Spending Variances LO9-1, LO9-2, LO9-3 question marks. "do what you can to help us get better control of our manufacturing overhead costs.' You find door opening device. The president has asked that you review the company's costing system and You have just been hired by FAB Corporation, the manufacturer of a revolutionary new garrang the company has never used a flexible budget, and you suggest that preparing such a budget woda be an excellent first step in overhead planning and control.EE After much effort and analysis, you determined the following cost formulas and gathered the following actual cost data for March: Utilities Maintenance Supplies ... Indirect labor Depreciation Cost Formula $20,600 + $0.10 per machine-hour $40,000 + $1.60 per machine-hour $0.30 per machine-hour $130,000 + $0.70 per machine-hour Actual Cost in March $24,200 $78,100 $8,400 $149,600 $71,500 $70,000 During March, the company worked 26,000 machine-hours and produced 15,000 units The company had originally planned to work 30,000 machine-hours during March. Required: Calculate the activity variances for March. (Hint: Refer to Exhibit 9-6.) Explain what these variances mean. 2. Calculate the spending variances for March. (Hint: Refer to Exhibit 9-7.) Explain what these variances mean. 1