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 17,000 hours for production: Variable overhead costs: Indirect factory labor $57,800 Power and light 12,410 Indirect materials 22,100 Total variable overhead cost $92,310 Fixed overhead costs: Supervisory salaries $62,240 Depreciation of plant and equipment 16,380 Insurance and property taxes 30,580 Total fixed overhead cost 109,200 Total factory overhead cost $201,510 Tannin has available 21,000 hours of monthly productive capacity in the Trim Department under normal business conditions. During July, the Trim Department actually used 16,000 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 $53,040 Power and light 11,470 Indirect materials 21,800 Total variable cost $86,310 Factory Overhead Cost Variance Report-Trim Department For the Month Ended July 31 Productive capacity for the month 21,000 hrs. Actual productive capacity used for the month 16,000 hrs. Budget Actual Cost (at Actual Production) Unfavorable (Favorable) Variances Variances Variable factory overhead costs: Indirect factory labor 53,040 $ 54,400 Power and light 11,470 11,680 Indirect materials 21,800 20,800 1,000 $ 86,310 86,880 Total variable factory overhead cost Fixed factory overhead costs: : Supervisory salaries 62,240 62,240 Depreciation of plant and equipment 16,380 16,380 Insurance and property taxes 30,580 30,580 Total fixed factory overhead cost 109,200 109,200 195,510 196,080 Total factory overhead cost Total controllable variances 1,000 Ox Net controllable variance-favorable $ Volume variance-unfavorable: Idle hours at the standard rate for fixed factory overhead 26,000 Total factory overhead cost variance-unfavorable $