=+KAT Equipment Inc., a manufacturer of construction equipment, prepared the following factory overhead cost budget for the Welding Department for December 2010. The company expected to operate the department at 100% of normal capacity of 5,600 hours.

Variable costs:

Indirect factory wages $17,640 Power and light 10,080 Indirect materials 8,400 _______ Total variable cost $36,120 Fixed costs:

Supervisory salaries $12,000 Depreciation of plant and equipment 31,450 Insurance and property taxes 9,750 _______ Total fixed cost 53,200 _______ Total factory overhead cost $89,320 _______ _______ During December, the department operated at 6,000 standard hours, and the factory overhead costs incurred were indirect factory wages, $18,760; power and light, $10,620;

indirect materials, $9,450; supervisory salaries, $12,000; depreciation of plant and equipment, $31,450; and insurance and property taxes, $9,750.

Instructions Prepare a factory overhead cost variance report for December. To be useful for cost control, the budgeted amounts should be based on 6,000 hours.