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 8,700 hours.

1	Variable costs:
2	Indirect factory wages	$40,020.00
3	Power and light	20,880.00
4	Indirect materials	17,400.00
5	Total variable cost		$78,300.00
6	Fixed costs:
7	Supervisory salaries	$19,800.00
8	Depreciation of plant and equipment	35,700.00
9	Insurance and property taxes	18,450.00
10	Total fixed cost		73,950.00
11	Total factory overhead cost		$152,250.00

During May, the department operated at 9,080 hours, and the factory overhead costs incurred were indirect factory wages, $42,268; power and light, $22,064; indirect materials, $18,700; supervisory salaries, $19,800; depreciation of plant and equipment, $35,700; and insurance and property taxes, $18,450.

Required:

Prepare a factory overhead cost variance report for May. To be useful for cost control, the budgeted amounts should be based on 9,080 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.

X

Factory Overhead Cost Variance Report

Shaded cells have feedback.

Prepare a factory overhead cost variance report for May. To be useful for cost control, the budgeted amounts should be based on 9,080 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.

Score: 139/174

Tiger Equipment Inc.

Factory Overhead Cost Variance ReportWelding Department

For the Month Ended May 31

1	Normal capacity for the month		8,700 hours
2	Actual production for the month		9,080 hours
3
4		Budget	Actual	Variances: Favorable	Variances: Unfavorable
5	Variable costs:
6
7
8
9
10	Fixed costs:
11
12
13
14
15
16
17
18
19
20

Points:

31.16 / 39

Feedback

Check My Work

A factory overhead cost variance report is useful to management in controlling factory overhead costs. Budgeted and actual costs for variable and fixed factory overhead along with the related controllable and volume variances are reported by each cost element.