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 6,500 hours.
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 6,500 hours. Variable costs: Indirect factory wages $22,100 Power and light 12,220 Indirect materials 10,270 Total variable cost $44,590 Fixed costs: Supervisory salaries $13,010 Depreciation of plant and equipment 33,360 Insurance and property taxes 10,180 Total fixed cost 56,550 Total factory overhead cost $101,140 During May, the department operated at 6,900 standard hours. The factory overhead costs incurred were indirect factory wages, $23,690; power and light, $12,740; indirect materials, $11,100; supervisory salaries, $13,010; depreciation of plant and equipment, $33,360; and insurance and property taxes, $10,180. Prepare a factory overhead cost variance report for May. To be useful for cost control, the budgeted amounts should be based on 6,900 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-Welding Department For the Month Ended May 31 Normal capacity for the month 6,500 hrs. Actual production for the month 6,900 hrs. Actual Budget Unfavorable Variances Favorable Variances Variable costs: Indirect factory wages $ $ Power and light 100 Indirect materials Total variable cost Total fixed cost 56,550 Total factory overhead cost $101,140 During May, the department operated at 6,900 standard hours. The factory overhead costs incurred were indirect factory wages, $23,690; power and light, $12,740; indirect materials, $11,100; supervisory salaries, $13,010; depreciation of plant and equipment, $33,360; and insurance and property taxes, $10,180. Required: Prepare a factory overhead cost variance report for May. To be useful for cost control, the budgeted amounts should be based on 6,900 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-Welding Department For the Month Ended May 31 Normal capacity for the month 6,500 hrs. Actual production for the month 6,900 hrs. Actual Budget Unfavorable Variances Favorable Variances Variable costs: Indirect factory wages Power and light 100 Indirect materials Total variable cost Fixed costs: Supervisory salaries Depreciation of plant and equipment Insurance and property taxes 00000 Total fixed cost 00000 0 Total factory overhead cost Total controllable variances Excess hours used over normal at the standard rate for fixed factory overhead
