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 7,500 hours. Variable costs: Indirect factory wages $23,250 Power and light 17,850 Indirect materials 15,600 Total variable cost $56,700 Fixed costs: Supervisory salaries $14,320 Depreciation of plant and equipment 36,730 Insurance and property taxes 11,200 Total fixed cost 62,250 Total factory overhead cost $118,950 During May, the department operated at 8,000 standard hours. The factory overhead costs incurred were indirect factory wages, $25,050; power and light, $18,700; indirect materials, $17,000; supervisory salaries, $14,320; depreciation of plant and equipment, $36,730; and insurance and property taxes, $11,200. Required: Prepare a factory overhead cost variance report for May. To be useful for cost control, the budgeted amounts should be based on 8,000 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. Tiger Equipment Inc. Factory Overhead Cost Variance Report-Welding Department For the Month Ended May 31 Normal capacity for the month 7,500 hrs. Actual production for the month 8,000 hrs. Actual Budget Unfavorable Variances Favorable Variances 25,050 18.700 23.250 X 17850 X 15,600 X 1,800 x 850 x lli 17,000 1.400 X 60,750 56,700 X 14,320 14,320 36,730 36,730 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 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 11.200 11,200 62,250 62,250 122.730 X 123,000 X 4,050 x 4,050 x 8