Factory Overhead Cost Variance Report Tannin Products Inc. prepared the following factory overhead cost budget for the Trim Department for July of the current year, during which it expected to use 10,000 hours for production: Variable overhead costs: Indirect factory labor $27,000 Power and light 7,500 Indirect materials 14,000 Total variable overhead cost $48,500 Fixed overhead costs: Supervisory salaries Depreciation of plant and equipment $47,880 12,600 23,520 Insurance and property taxes Total fixed overhead cost 84,000 Total factory overhead cost $132,500 Tannin has available 14,000 hours of monthly productive capacity in the Trim Department under normal business conditions. During July, the Trim Department actually used 9,000 hours for production. The actual fixed costs were as budgeted. The actual variable overhead for July was as follows: Actual variable factory overhead costs: Indirect factory labor $23,690 Power and light 6,630 Indirect materials 13,200 Total variable cost $43.520 Indirect factory labor $23,690 Power and light 6,630 Indirect materials 13,200 Total variable cost $43,520 Construct a factory overhead cost variance report for the Trim Department for July. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number. If an amount box does not require an entry, leave it blank. Round your interim computations to the nearest cent, if required. Tannin Products Inc. Factory Overhead Cost Variance Report-Trim Department For the Month Ended July 31 Productive capacity for the month 14,000 hrs. Actual productive capacity used for the month 9,000 hrs. Budget Unfavorable (Favorable) Actual Cost (at Actual Production) Variances Variances Variable factory overhead costs: Indirect factory labor Power and light Indirect materials Total variable factory overhead cost Fixed factory overhead costs: Supervisory salaries Depreciation of plant and equipment Insurance and property taxes Tannin Products Inc. Factory Overhead Cost Variance Report-Trim Department For the Month Ended July 31 Productive capacity for the month 14,000 hrs. Actual productive capacity used for the month 9,000 hrs. Budget Actual Cost (at Actual Production) Variable factory overhead costs: Indirect factory labor Power and light Unfavorable (Favorable) Variances Variances 89 Indirect materials Total variable factory overhead cost $ Fixed factory overhead costs: Supervisory salaries Depreciation of plant and equipment Insurance and property taxes Total fixed factory overhead cost $ $ Total factory overhead cost $ Total controllable variances Net controllable variance-favorable O Volume variance-unfavorable: Idle hours at the standard rate for fixed factory overhead Total factory overhead cost variance-unfavorable
