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 6,700 hours.

Variable costs: Indirect factory wages $21,440 Power and light 15,477 Indirect materials 13,467 Total variable cost $50,384 Fixed costs: Supervisory salaries $11,250 Depreciation of plant and equipment 28,860 Insurance and property taxes 8,800 Total fixed cost 48,910 Total factory overhead cost $99,294

During October, the department operated at 7,100 standard hours, and the factory overhead costs incurred were indirect factory wages, $22,950; power and light, $16,110; indirect materials, $14,600; supervisory salaries, $11,250; depreciation of plant and equipment, $28,860; and insurance and property taxes, $8,800.

Required:

Prepare a factory overhead cost variance report for October. To be useful for cost control, the budgeted amounts should be based on 7,100 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.

Feeling Better Medical Inc. Factory Overhead Cost Variance ReportAssembly Department For the Month Ended October 31 Normal capacity for the month 6,700 hrs. Actual production for the month 7,100 hrs. Budget Actual Favorable Variances Unfavorable Variances Variable costs: Indirect factory wages $ $ $ Power and light $ Indirect materials Total variable cost $ $ Fixed costs: Supervisory salaries $ $ Depreciation of plant and equipment Insurance and property taxes Total fixed cost $ $ Total factory overhead cost $ $ Total controllable variances $ $ $ Excess hours used over normal at the standard rate for fixed factory overhead $