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 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 actual cost in march utilities $16,700 plus $0.14 per machine-hour $ 21,160 maintenance $38,800 plus $1.70 per machine-hour $ 64,900 supplies $0.80 per machine-hour $ 15,000 indirect labor $94,800 plus $1.40 per machine-hour $ 122,300 depreciation $67,800 $ 69,500 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. calculate the activity variances for march. 2. calculate the spending variances for march.

answer/// equals both average variable cost and average total cost at their respective minimums;

of the three mortgage options that demarco and tanya have to choose from, the balloon payment mortgage would be their best option, over adjustable payment and fixed payment plans.ultimately, the balloon payment plan would save demarco and tanya overall, in interest, would cost less monthly, and they would only have to make these payments for 8 years, opposing to 30 years for adjustable or fixed payment plans. 

overall, demarco and tanya would save $80,811 if they chose balloon payments over fixed payments, and would save $116,711 if they choose balloon payments over adjustable payments. benefits with choosing fixed payments over adjustable payments is that, in the end, the payments will still be $836.30 a month, while with adjustable payments, the initial monthly payments will be $763.38 to $1082.70 a month, ultimately leading to a more costly purchase. benefits with choosing fixed payments over balloon payments are not present. benefits in choosing adjustable payments over is that it has a lower interest rate, and starts with lower monthly payments initially. benefits in choosing adjustable payments over balloon payments include a lower interest rate, and lower initial monthly payments. benefits in choosing balloon payments over fixed payments include lower interest rates, lower overall price, lower monthly payments, takes less time to pay off, and does not require a downpayment. benefits in choosing balloon payments over adjustable payments include, lower monthly payments (when averaged), takes less time to pay off, and lower overall price.

hence, option c, balloon payments, is the best option for demarco and tanya to make this purchase, for it will save them a minimum of $80811, and a maximum of $116,711.