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 8,100 hours. Variable costs: Indirect factory wages Power and light Indirect materials $25,920 17,334 14,094 $57,348 Total variable cost Fixed costs: Supervisory salaries $16,580 Depreciation of plant and equipment Insurance and property taxes 42,530 12,980 Total fixed cost 72,090 Total factory overhead cost $129,438 Required: During May, the department operated at 8,600 standard hours. The factory overhead costs incurred were indirect factory wages, $27,800; power and light, $18,070; indirect materials, $15,300; supervisory salaries, $16,580; depreciation of plant and equipment, $42,530; and insurance and property taxes, $12,980. Prepare a factory overhead cost variance report for May. To be useful for cost control, the budgeted amounts should be based on 8,600 hours. Enter a favorable variance as a negative number using a minus sign and 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. Normal capacity for the month 8,100 hrs. Actual production for the month 8,600 hrs. Tiger Equipment Inc. Factory Overhead Cost Variance Report-Welding Department For the Month Ended May 31 Variable costs: Indirect factory wages Power and light Indirect materials 0001 1000 Actual Budget Unfavorable Variances Favorable Variances 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 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 $ Check My Work A factory overhead cost variance report is useful to management in controlling factory overhead costs. Budgeted and actual costs for variable and fixed factory overhead along with the related controllable and volume variances are reported by each cost element. Feedback