Ch 22 Part 2

Instructions

Tiger Equipment Inc., a manufacturer of construction equipment, prepared the following factory overhead cost budget for the Welding Department for May of the current year. The company expected to operate the department at 100% of normal capacity of 8,400 hours.

During May, the department operated at 8,840 standard hours, and the factory overhead costs incurred were indirect factory wages, $46,528; power and light, $25,368; indirect materials, $18,300; supervisory salaries, $19,400; depreciation of plant and equipment, $35,800; and insurance and property taxes, $16,200.

Prepare a factory overhead cost variance report for May. To be useful for cost control, the budgeted amounts should be based on 8,840 hours. Refer to the Amount Descriptions list provided for the exact wording of the answer choices for text entries. Enter all variances as positive amounts.

Amount Descriptions

Factory OH Cost Var Report

Prepare a factory overhead cost variance report for May. To be useful for cost control, the budgeted amounts should be based on 8,860 hours. Refer to the Amount Descriptions list provided for the exact wording of the answer choices for text entries. Enter all variances as positive amounts.

TIGER EQUIPMENT INC. Factory Overhead Cost Budget-Welding Department For the Month Ended May 31 1 Variable costs: Indirect factory wages 3Power and light $43,680.00 24,360.00 16,800.00 Indirect materials 5 Total variable cost $84,840.00 6 Fixed costs: $19,400.00 5,800.00 16,200.00 Supervisory salaries Insurance and property taxes 10 Total fixed cost 11 Total factory overhead cost 71,400.00 $156,240.00