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: Indirect factory wages Power and light Indirect materials Total variable cost Fixed costs: Supervisory salaries $30,240 20,160 16,800 $67,200 $20,000 Depreciation of plant and equipment 36,200 Insurance and property taxes 15,200 Total fixed cost 71,400 $138,600 Total factory overhead cost During May, the department operated at 8,860 hours, and the factory overhead costs incurred were indirect factory wages, $32,400; power and light, $21,000; indirect materials, $18,250; supervisory salaries, $20,000; depreciation of plant and equipment, $36,200; and insurance and property taxes, $15,200. Required: Prepare a factory overhead cost variance report for May. To be useful for cost control, the budgeted amounts should be based on 8,860 hours. 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. 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 8,860 hrs. Budget Actual (at Actual Unfavorable Favorable Cost Production) Variances Variances Variable factory overhead costs: Indirect factory wages 32,400 $ 31,896 $ 504 $ Power and light 21,000 21,264 0 264 x Indirect materials 18,250 17,720 5300 0 Total variable cost 86,700 X $ 70,880 Fixed factory overhead costs: Supervisory salaries 20,000 20,000 Depreciation of plant and equipment 36,200 36,200 Insurance and property taxes 15,200 15,200 Total fixed cost 09 71,400 71,400 Total factory overhead cost 143,050 $ 142,280 $ 1,034 $ 264 X Total controllable variances Net controllable variance-unfavorable 770 Volume variance-favorable: Excess hours used over normal at the standard rate for fixed factory overhead 3,910 X Total factory overhead cost variance-favorable $ 3,140 X