Tannin Products Inc. prepared the following factory overhead cost budget for the Trim Department for July of the current year, during which it expected to use 25,000 hours for production:

TANNIN PRODUCTS INC.

Factory Overhead Cost BudgetTrim Department

For the Month Ended July 31

1	Variable overhead cost:
2	Indirect factory labor	$52,500.00
3	Power and light	12,500.00
4	Indirect materials	25,000.00
5	Total variable overhead cost		$90,000.00
6	Fixed overhead cost:
7	Supervisory salaries	$52,400.00
8	Depreciation of plant and equipment	39,200.00
9	Insurance and property taxes	163,400.00
10	Total fixed overhead cost		255,000.00
11	Total factory overhead cost		$345,000.00

Tannin has available 30,000 hours of monthly productive capacity in the Trim Department under normal business conditions. During July, the Trim Department actually used 27,000 hours for production. The actual fixed costs were as budgeted. The actual variable overhead for July was as follows:

Actual variable factory overhead cost:
2	Indirect factory labor	$55,770.00
3	Power and light	13,270.00
4	Indirect materials	29,700.00
5	Total variable cost	$98,740.00

Construct a factory overhead cost variance report for the Trim Department for July. Refer to the Amount Descriptions list provided for the exact wording of the answer choices for text entries. Enter favorable variances as negative amounts.

TANNIN PRODUCTS INC.

Factory Overhead Cost Variance ReportTrim Department

For the Month Ended July 31

1	Productive capacity for the month		30,000 hours
2	Actual production for the month		27,000 hours
3
4		Budget (at Actual Production)	Actual	Variances: Favorable	Variances: Unfavorable
5	Variable factory overhead costs:
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10	Fixed factory overhead costs:
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