Factory Overhead Cost Variance Report

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

Variable costs:
Indirect factory wages	$21,300
Power and light	14,981
Indirect materials	12,141
Total variable cost		$48,422
Fixed costs:
Supervisory salaries	$14,040
Depreciation of plant and equipment	36,030
Insurance and property taxes	10,990
Total fixed cost		61,060
Total factory overhead cost		$109,482

During August, the department operated at 7,500 standard hours, and the factory overhead costs incurred were indirect factory wages, $22,730; power and light, $15,540; indirect materials, $13,100; supervisory salaries, $14,040; depreciation of plant and equipment, $36,030; and insurance and property taxes, $10,990.

Required:

Prepare a factory overhead cost variance report for August. To be useful for cost control, the budgeted amounts should be based on 7,500 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.

Get Better Medical Inc.
Factory Overhead Cost Variance ReportAssembly Department
For the Month Ended August 31
Normal capacity for the month 7,100 hrs.
Actual production for the month 7,500 hrs.
	Actual Cost	Budget (at Actual Production)	Unfavorable Variances	Favorable Variances
Variable factory overhead costs:
Indirect factory wages	$	$	$	$
Power and light
Indirect materials
Total variable cost	$	$
Fixed factory overhead costs:
Supervisory salaries	$	$
Depreciation of plant and equipment
Insurance and property taxes
Total fixed cost	$	$
Total factory overhead cost	$	$
Total controllable variances			$	$
Net controllable variance-unfavorable			$
Volume variance-favorable:
Excess hours used over normal at the standard rate for fixed factory overhead
Total factory overhead cost variance-unfavorable			$