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 13,000 hours for production: Variable overhead cost: Indirect factory labor $31,200 Power and light 9,360 Indirect materials 19,500 Total variable overhead cost $ 60,060 Fixed overhead cost: Supervisory salaries $55,230 Depreciation of plant and equipment 14,540 Insurance and property taxes 27,130 Total fixed overhead cost 96,900 Total factory overhead cost $156,960 Tannin has available 17,000 hours of monthly productive capacity in the Trim Department under normal business conditions. During July, the Trim Department actually used 12,000 hours for production. The actual fixed costs were as budgeted. The actual variable overhead for July was as follows: Actual variable factory overhead cost: Indirect factory labor $28,080 Power and light 8,480 Indirect materials 18,900 Total variable cost $55,460 Tannin Products Inc. Factory Overhead Cost Variance Report-Trim Department For the Month Ended July 31 Productive capacity for the month 17,000 hrs. Actual productive capacity used for the month 12,000 hrs. Actual Budget (at actual production) Unfavorable Variances Variable factory overhead costs: Indirect factory labor Favorable Variances 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 Total fixed factory overhead cost Total factory overhead cost Total controllable variances O ND LIN Idle hours at the standard rate for fixed factory overhead