Star Medical, Inc., a manufacturer of disposable medical supplies, prepared the following factory overhead cost budget for the Assembly Department for October 2012. The company expected to operate the department at 100% of normal capacity of 24,000 hours.

During October, the department operated at 22,500 hours, and the factory overhead costs incurred were indirect factory wages, $167,550; power and light, $116,800; indirect materials, $31,950; supervisory salaries, $72,000; depreciation of plant and equipment, $51,500; and insurance and property taxes, $24,100.

Prepare a factory overhead cost variance report for October. To be useful for cost control, the budgeted amounts should be based on 22,500 hours. Use the minus sign to enter favorable variances as negative numbers.

Transcribed Image Text:

Star Medical, Ine. Normal capacity for the month 24,000 hrs. Actual production for the month 22,500 hrs. Budget Favorable Variances blo Variances Variable costs direct factory wages Power and light diroct matonals Total variable cost Fxed costs: Supervisory salaries preciation of plant and equipment Insurance and property taxes Total foxed cost Total factory overhead cost Total controllable variancos Net controllable variance-unfavorable Volume variance-favorable: Idle hours at the standard rate for foxed factory overhead Total factory overhead cost varia