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 March $ 21,540 $ 52,900 $ 15,000 Utilities. Maintenance Supplies Indirect labor Depreciation Cost Formula $16,700+ $0.16 per machine-hour $38,200+ $1.10 per machine-hour $0.80 per machine-hour $94,200+ $1.40 per machine-hour $68, 200 $ 121,700 $ 69,900 During March, the company worked 17,000 machine-hours and produced 11,000 units. The company had originally planned to work 19,000 machine-hours during March. Required: 1. Prepare a flexible budget for March. 2. Prepare a report showing the spending variances for March.

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: Cost Formula Utilities $16,200 + $0.21 per machine-hour Maintenance $38,900 + $1.20 per machine-hour Supplies $0.80 per machine-hour Indirect labor $94,300 + $1.30 per machine-hour Depreciation $67,500 Actual Cost in March $ 21,990 $ 55,500 $ 15,000 $ 119,900 $ 69,200 During March, the company worked 17,000 machine-hours and produced 11,000 units. The company had originally planned to work 19,000 machine-hours during March.…

The head of production at your manufacturing facility said, “Our manufacturing processes are doing great. All our variances for materials, labor, and overhead are favorable. Actual costs for all our products are far below standard costs. We are killing it!” You, as company controller, just shake your head and think of how your respond to the head of production. What would you say?

After reviewing the new activity-based costing system that Nancy Chen has implemented at IVC's CenterPoint manufacturing facility, Tom Spencer, the production supervisor, believes that he can reduce production costs by reducing the time spent on machine setups. He has spent the last month working with employees in the plant to change over the machines more quickly with the same reliability. He plans to produce 118,000 units of the Sport model and 49,000 units of the Pro model in the first quarter. He believes that with his more efficient setup routine, he can reduce the number of setup hours for both the Sport and the Pro products by one-third. Cost Drivers and Cost Driver Volumes-CenterPoint Manufacturing Facility Activity Assembly building Assembling Setting up machines Handling material Direct material Direct labor Assembly Packaging Total direct labor Cost Driver Machine-hours Setup hours Production runs Packaging building Direct labor-hours Inspecting and packing Shipping Number…