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 30,000 hours. Variable costs: Indirect factory wages $247,500 Power and light 189,000 Indirect materials 52,500 Total variable cost $489,000 Fixed costs: Supervisory salaries $126,000 Depreciation of plant and equipment 70,000 Insurance and property taxes 44,000 Total fixed cost 240,000 Total factory overhead cost $729,000 During October, the department operated at 28,500 hours. The factory overhead costs incurred were indirect factory wages, $234,000; power and light, $178,500; indirect materials, $50,600; supervisory salaries, $126,000; depreciation of plant and equipment, $70,000; and insurance and property taxes, $44,000. Required: Prepare a factory overhead cost variance report for October. To be useful for cost control, the budgeted amounts should be based on 28,500 hours. Enter all amounts as positive numbers a except favorable variances. Use a minus sign to indicate favorable variances. If an amount box does not require an entry, leave it blank. Feeling Better Medical Inc. Factory Overhead Cost Variance Report Assembly Department For the Month Ended October 31 Normal capacity for the month 30,000 hrs. Actual production for the month 28,500 hrs. Actual Budget Unfavorable Variances Favorable Variances Variable costs: Indirect factory wages 235,125 x 234,000 x 1.125 x Power and light 179,550 X 178,500 x 1,050 x Indirect materials 49,875 X 50,600 x 725 X Total variable cost $464,550 X $ 86,700 X 86,700 x Fixed costs: Supervisory salaries 126,000 $ 126,000 Depreciation of plant and equipment 70,000 70,000 Insurance and property taxes 44,000 44,000 Total fixed cost 240,000 240,000 Total factory overhead cost 704,550 X 326,700 x Total controllable variances 2,175 x 725 X Net controllable variance-favorable 1,450 X Volume variance-unfavorable: Idle hours at the standard rate for fixed factory overhead 12,000 Total factory overhead cost variance-unfavorable $ 10,550 Feedback *Check My Work A factory overhead cost variance report is useful to management in controlling factory overhead costs. Budgeted and actual costs for variable and fixed factory overhead along with the related controllable and volume variances are reported by each cost element