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 8,900 hours.

Variable costs:
Indirect factory wages	$25,810
Power and light	18,156
Indirect materials	15,486
Total variable cost		$59,452
Fixed costs:
Supervisory salaries	$18,220
Depreciation of plant and equipment	46,730
Insurance and property taxes	14,260
Total fixed cost		79,210
Total factory overhead cost		$138,662

During October, the department operated at 9,400 standard hours, and the factory overhead costs incurred were indirect factory wages, $27,530; power and light, $18,830; indirect materials, $16,700; supervisory salaries, $18,220; depreciation of plant and equipment, $46,730; and insurance and property taxes, $14,260.

Required:

Prepare a factory overhead cost variance report for October. To be useful for cost control, the budgeted amounts should be based on 9,400 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.

Feeling Better Medical Inc.
Factory Overhead Cost Variance Report—Assembly Department
For the Month Ended October 31
Normal capacity for the month 8,900 hrs.
Actual production for the month 9,400 hrs.
	Budget	Actual	Favorable Variances	Unfavorable Variances
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				$