Wethington Company, a manufacturer of disposable medical supplies, prepared the following factory overhead cost budget for the Assembly Department for October 2006. The company expected to operate the department at 100% of normal capacity of 25,000 hours.

During October, the department operated at 23,750 hours, and the factory overhead costs incurred were indirect factory wages, $207,500; power and light, $153,200; indirect materials, $37,400; supervisory salaries, $120,000; depreciation of plant and equipment, $95,000; and insurance and property taxes, $27,000.

Instructions
Prepare a factory overhead cost variance report for October. To be useful for cost control, the budgeted amounts should be based on 23,750hours.

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Variable costs: Indirect factory wages Power and light Indirect materials $220,000 160,000 40,000 Total variable cost $420,000 Fixed costs: Supervisory salaries Depreciation of plant and equipment Insurance and property taxes $120,000 95,000 27,000 Total fixed cost 242,000 $662,000 Total factory overhead cost