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:
During March, the company worked machinehours and produced units. The company had originally planned
to work machinehours during March.
Required:
Prepare a flexible budget for March.
Prepare a report showing the spending variances for March.
