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 $ 20,160 Power and light Indirect materials 16,800 Total variable cost $67,200 Fixed costs: $20,000 Supervisory salaries Depreciation of plant and equipment 36,200 Insurance and property taxes 15,200 71,400 Total fixed cost Total factory overhead cost $138,600 During May, the department operated at 8,860 standard hours. 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. 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-Assembly Department For the Month Ended May 31 Normal capacity for the month 8,400 hrs. Actual production for the month 8,860 hrs. Actual Budget Unfavorable Variances Favorable Variances Variable costs: Indirect factory wages 31,896 x $ 32,400 x $ 504 x Power and light 21,264 X 21,000 X 264 x Indirect materials 17,720 18,250 X 0 X 530 X X Total variable cost 70,880 x 71,650 X Fixed costs: 20,000 20,000 Supervisory salaries Depreciation of plant and equipment Insurance and property taxes 36,200 36,200 15,200 15,200 Total fixed cost 71,400 71.400 Total factory overhead cost 142,280X 143,050 x 264 X 1,034 x Total controllable variances Net controllable variance-unfavorable Volume variance-favorable: 770 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 Feedback 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