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 $30,240

Power and light $20,160

Indirect Materials $16,800

Total Variable Cost : $67,200

Fixed Costs:

Supervisory Salaries $20,000

Depreciation of Plant and equipment $36,200

Insurance and property taxes $15,200

Total Fixed Cost: $71,400

Total Factory overhead cost $138,600

During May, the department operated at $8,860 standard 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, $15200.

Instructions:

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.

Please see attached spreadsheet.

Problem 22(7)-4A Name: Section: Score: 0% Key Code: [Key code here] Instructions Answers are entered in the cells with gray backgrounds. Cells with non-gray backgrounds are protected and cannot be edited. An asterisk (*) will appear to the right of an incorrect entry. Enter a zero in cells you would otherwise leave blank. TIGER EQUIPMENT INC. Factory Overhead Cost Variance ReportWelding Department For the Month Ended May 31 Normal capacity for the month: Actual production for the month: hours hours Budget (at actual production) Variable costs: Indirect factory wages Power and light Indirect materials Total variable cost Fixed costs: Actual Variances Favorable Unfavorable Alternative Computation of O ernative Computation of Overhead Variances: Factory Overhead Actual costs Balance