You have just been hired by FAB Corporation, the manufacturer of a revolutionary new garage door...

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Accounting

You have just been hired by FAB Corporation, the manufacturer ofa revolutionary new garage door opening device. The president hasasked that you review the company’s costing system and “do what youcan to help us get better control of our manufacturing overheadcosts.” You find that the company has never used a flexible budget,and you suggest that preparing such a budget would be an excellentfirst step in overhead planning and control.
After much effort and analysis, you determined the followingcost formulas and gathered the following actual cost data forMarch:
Cost Formula Actual Cost in March
Utilities $16,100 plus $0.17 per machine-hour $ 20,450
Maintenance $38,800 plus $1.60 per machine-hour $ 56,600
Supplies $0.90 per machine-hour $ 13,300
Indirect labor $94,900 plus $1.80 per machine-hour $ 122,800
Depreciation $67,700 $ 69,400
During March, the company worked 13,000 machine-hours andproduced 7,000 units. The company had originally planned to work15,000 machine-hours during March.
Required:
1. Calculate the activity variances for March.
2. Calculate the spending variances for March.

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You have just been hired by FAB Corporation, the manufacturer ofa revolutionary new garage door opening device. The president hasasked that you review the company’s costing system and “do what youcan to help us get better control of our manufacturing overheadcosts.” You find that the company has never used a flexible budget,and you suggest that preparing such a budget would be an excellentfirst step in overhead planning and control.After much effort and analysis, you determined the followingcost formulas and gathered the following actual cost data forMarch:Cost FormulaActual Cost in MarchUtilities$16,100 plus $0.17 per machine-hour$20,450Maintenance$38,800 plus $1.60 per machine-hour$56,600Supplies$0.90 per machine-hour$13,300Indirect labor$94,900 plus $1.80 per machine-hour$122,800Depreciation$67,700$69,400During March, the company worked 13,000 machine-hours andproduced 7,000 units. The company had originally planned to work15,000 machine-hours during March.Required:1. Calculate the activity variances for March.2. Calculate the spending variances for March.

	Cost Formula	Actual Cost in March
Utilities	$16,100 plus $0.17 per machine-hour	$	20,450
Maintenance	$38,800 plus $1.60 per machine-hour	$	56,600
Supplies	$0.90 per machine-hour	$	13,300
Indirect labor	$94,900 plus $1.80 per machine-hour	$	122,800
Depreciation	$67,700	$	69,400