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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



Depreciation of plant and equipment


Insurance and property taxes


Total fixed cost



Total factory overhead cost



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.


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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