Factory Overhead Cost Variance Report Tiger Equipment Inc., a manufacturer of construction equipment, prepared the following factory overhead cost budget for the Welding Department for May of the current year. The company expected to operate the department at 100% of normal capacity of 8,400 hours. Variable costs: $26,040 Indirect factory wages Power and light Indirect materials 18,144 14,784 Total variable cost S58,968 Fixed costs: $13,910 Supervisory salaries Depreciation of plant and equipment Insurance and property taxes 35,680 10,890 Total fixed cost 60,480 Total factory overhead cost $119,448 During May, the department operated at 8,900 standard hours. The factory overhead costs incurred were indirect factory wages, $27,870; power and light, $18,880; indirect materials, $16,000; supervisory salaries, $13,910; depreciation of plant and equipment, $35,680; and Insurance and property taxes, $10,890. Required: Prepare a factory overhead cost variance report for May. To be useful for cost control, the budgeted amounts should be based on 8,900 hours. Enter a favorable variance as a negative number using a minus sign and a 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. Tiger Equipment Inc. Factory Overhead Cost Variance Report-Welding Department For the Month Ended May 31 Normal capacity for the month 8,400 hrs. Actual production for the month 8,900 hrs. Artual Rudent Infannahle Varianres Earrahle Marianres Check My Work Previous Actual Budget Unfavorable Variances Favorable Variances Variable costs: Indirect factory wages Power and light Indirect materials Total variable cost Fixed costs: Supervisory salaries Depreciation of plant and equipment Insurance and property taxes Total fixed cost $ Total factory overhead cost din Oo 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-favorable Feedback Check My Work A factory overhead cost varlance report is useful to management in controlling factory overhead costs. Budgeted and actual costs for varlable and fixed factory overhead along with the related controllable and volume variances are reported by each cost element. Check My Work Previous