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Factory Overhead Cost Variance Report

Feeling Better Medical Inc., a manufacturer of disposable medical supplies, prepared the following factory overhead cost budget for the Assembly Department for October of the current year. The company expected to operate the department at $100\%$ of normal capacity of $6,700$ hours.

Line Item Description Amount Amount

Variable costs:

Indirect factory wages $$22,110$

Power and light $15,276$

Indirect materials $12,596$

Total variable cost $$49,982$

Fixed costs:

Supervisory salaries $$11,870$

Depreciation of plant and equipment $30,440$

Insurance and property taxes $9,280$

Total fixed cost $51,590$

Total factory overhead cost $$51,590$

During October, the department operated at $7,100$ standard hours, and the factory overhead costs incurred were indirect factory wages, $$23,660$; power and light, $$15,900$; indirect materials, $$13,600$; supervisory salaries, $$11,870$; depreciation of plant and equipment, $$30,440$; and insurance and property taxes, $$9,280.$

Required:

Prepare a factory overhead cost variance report for October. To be useful for cost control, the budgeted amounts should be based on $7,100$ 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 $6,700$ hrs$.$

Actual production for the month $7,100$ hrs$.$

Feeling Better Medical Inc.

Factory Overhead Cost Variance Report$$Assembly Department

For the Month Ended October $31$

Line Item Description

Actual

Cost Budget

$($at Actual

Production$)$

Unfavorable

Variances

Favorable

Variances

Variable factory overhead costs:

Indirect factory wages $Indirect factory wages

$23,660$

$Indirect factory wages

$22,110$

$Indirect factory wages

$1,550$

$Indirect factory wages

$0$

Power and light Power and light

$15,900$

Power and light

$15,276$

Power and light

$624$

Power and light

$0$

Indirect materials Indirect materials

$13,600\mathrm{.}00$

Indirect materials

$12,596$

Indirect materials

$1,004$

Indirect materials

$0$

Total variable cost $Total variable cost

$53,160$

$Total variable cost

$49,982$

Fixed factory overhead costs:

Supervisory salaries $Supervisory salaries

$11,870$

$Supervisory salaries

$11,870$

Depreciation of plant and equipment Depreciation of plant and equipment

$30,440$

Depreciation of plant and equipment

$30,440$

Insurance and property taxes Insurance and property taxes

$9,280$

Insurance and property taxes

$9,280$

Total fixed cost $Total fixed cost

$51,590$

$Total fixed cost

$51,590$

Total factory overhead cost $Total factory overhead cost

$104,750$

$Total factory overhead cost

$101,572$

Total controllable variances $Total controllable variances

$3,802$

$Total controllable variances

$0$

Net controllable variance$-$unfavorable

blank blank $Net controllable variance$-$unfavorable

$0$

blank

Volume variance$-$favorable:

Excess hours used over normal at the standard rate for fixed factory overhead blank blank fill in the blank $29$

$29$

blank

Total factory overhead cost variance$-$favorable

blank blank $Total factory overhead cost variance$-$favorable

$0$

blank