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(Solution Download) factory overhead cost variance report Tiger Equipment Inc., a manufacturer of construction...

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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 8,400 hours.

 

Variable costs:

Indirect factory wages                                             $30,240

Power and light                                                               20,160

Indirect materials                                                        16,800

Total variable cost                                                                                $  67,200

Fixed costs:


 

Supervisory salaries

$20,000

 

Depreciation of plant and equipment

36,200

Insurance and property taxes

  15,200

Total fixed cost

 

71,400

Total factory overhead cost

 

$138,600

During May, the department operated at 8,860 standard 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.

instructions

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.

 







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