Factory Overhead Cost Variance Report

Feeling Better Medical Inc., a manufacturer of disposable medical supplies, prepared the following factory overhead cost budget for the Assembly Department for October of the current year. The company expected to operate the department at $100\%$ of normal capacity of $7,900$ hours.

Line Item Description Amount Amount

Variable costs:

Indirect factory wages $$23,700$

Power and light $17,064$

Indirect materials $13,904$

Total variable cost $$54,668$

Fixed costs:

Supervisory salaries $$15,080$

Depreciation of plant and equipment $38,690$

Insurance and property taxes $11,800$

Total fixed cost $65,570$

Total factory overhead cost $$65,570$

During October, the department operated at $8,400$ standard hours, and the factory overhead costs incurred were indirect factory wages, $$25,450$; power and light, $$17,820$; indirect materials, $$15,100$; supervisory salaries, $$15,080$; depreciation of plant and equipment, $$38,690$; and insurance and property taxes, $$11,800.$

Required:

Prepare a factory overhead cost variance report for October. To be useful for cost control, the budgeted amounts should be based on $8,400$ hours. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number. Round your per unit computations to the nearest cent, if required. If an amount box does not require an entry, leave it blank.

Normal capacity for the month $7,900$ hrs$.$

Actual production for the month $8,400$ hrs$.$

Feeling Better Medical Inc.

Factory Overhead Cost Variance Report$$Assembly Department

For the Month Ended October $31$

Line Item Description

Actual

Cost Budget

$($at Actual

Production$)$

Unfavorable

Variances

Favorable

Variances

Variable factory overhead costs:

Indirect factory wages $Indirect factory wages

$Indirect factory wages

$Indirect factory wages

$Indirect factory wages

Power and light Power and light

Power and light

Power and light

Power and light

Indirect materials Indirect materials

Indirect materials

Indirect materials

Indirect materials

Total variable cost $Total variable cost

$Total variable cost

Fixed factory overhead costs:

Supervisory salaries $Supervisory salaries

$Supervisory salaries

Depreciation of plant and equipment Depreciation of plant and equipment

Depreciation of plant and equipment

Insurance and property taxes Insurance and property taxes

Insurance and property taxes

Total fixed cost $Total fixed cost

$Total fixed cost

Total factory overhead cost $Total factory overhead cost

$Total factory overhead cost

Total controllable variances $Total controllable variances

$Total controllable variances

Net controllable variance$-$favorable

blank blank $Net controllable variance$-$favorable

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Volume variance$-$favorable:

Excess hours used over normal at the standard rate for fixed factory overhead blank blank fill in the blank $29$

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Total factory overhead cost variance$-$favorable

blank blank $Total factory overhead cost variance$-$favorable

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