Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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.

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.

1

Variable costs:

2

Indirect factory wages

$30,240.00

3

Power and light

20,160.00

4

Indirect materials

16,800.00

5

Total variable cost

$67,200.00

6

Fixed costs:

7

Supervisory salaries

$20,000.00

8

Depreciation of plant and equipment

36,200.00

9

Insurance and property taxes

15,200.00

10

Total fixed cost

71,400.00

11

Total factory overhead cost

$138,600.00

During May, the department operated at 8,860 hours, and 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. Refer to the Amount Descriptions list provided for the exact wording of the answer choices for text entries. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Cutting Edge Internal Auditing

Authors: Jeffrey Ridley

1st Edition

0470510390, 978-0470510391

More Books

Students also viewed these Accounting questions

Question

4. Describe the role of narratives in constructing history.

Answered: 1 week ago

Question

1. Identify six different types of history.

Answered: 1 week ago