Factory Overhead Cost Variance Report Feeling Better Medical Inc., a manufacturer of disposable medical supplies, prepared the following factory overhead cost budget for the Assembly Department for October of the current year. The company expected to operate the department at 100% of normal capacity of 9,000 hours. Variable costs: Indirect factory wages Power and light Indirect materials Total variable cost Fixed costs: Supervisory salaries Depreciation of plant and equipment Insurance and property taxes Total fixed cost $27,000 16,830 13,230 $17,390 44,600 13,610 Normal capacity for the month 9,000 hrs. Actual production for the month 9 500 hrs. $57,060 75,600 $132,660 Total factory overhead cost During October, the department operated at 9,500 standard hours, and the factory overhead costs incurred were indirect factory wages, $28,790; power and light, $17,450; indirect materials, $14,200; supervisory salaries, $17,390; depreciation of plant and equipment, $44,600; and insurance and property taxes, $13,610. Required: Prepare a factory overhead cost variance report for October. To be useful for cost control, the budgeted amounts should be based on 9,500 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. Feeling Better Medical Inc. Factory Overhead Cost Variance Report-Assembly Department For the Month Ended October 31
Factory Overhead Cost Variance Report Feeling Better Medical Inc., a manufacturer of disposable medical supplies, prepared the following factory overhead cost budget for the Assembly Department for October of the current year. The company expected to operate the department at 100% of normal capacity of 9,000 hours. Variable costs: Indirect factory wages Power and light Indirect materials Total variable cost Fixed costs: Supervisory salaries Depreciation of plant and equipment Insurance and property taxes Total fixed cost $27,000 16,830 13,230 $17,390 44,600 13,610 Normal capacity for the month 9,000 hrs. Actual production for the month 9 500 hrs. $57,060 75,600 $132,660 Total factory overhead cost During October, the department operated at 9,500 standard hours, and the factory overhead costs incurred were indirect factory wages, $28,790; power and light, $17,450; indirect materials, $14,200; supervisory salaries, $17,390; depreciation of plant and equipment, $44,600; and insurance and property taxes, $13,610. Required: Prepare a factory overhead cost variance report for October. To be useful for cost control, the budgeted amounts should be based on 9,500 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. Feeling Better Medical Inc. Factory Overhead Cost Variance Report-Assembly Department For the Month Ended October 31
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter9: Evaluating Variances From Standard Costs
Section: Chapter Questions
Problem 4PB: Factory overhead cost variance report Feeling Better Medical Inc., a manufacturer of disposable...
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Concept explainers
Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
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Transcribed Image Text:Factory Overhead Cost Variance Report
Feeling Better Medical Inc., a manufacturer of disposable medical supplies, prepared the following factory overhead cost budget for the Assembly Department for October
of the current year. The company expected to operate the department at 100% of normal capacity of 9,000 hours.
Variable costs:
Indirect factory wages
Power and light
Indirect materials
Total variable cost
Fixed costs:
Supervisory salaries
Depreciation of plant and equipment
Insurance and property taxes
Total fixed cost
$27,000
16,830
13,230
$17,390
44,600
13,610
$57,060
Normal capacity for the month 9,000 hrs.
Actual production for the month 9.500 hrs.
75,600
$132,660
Total factory overhead cost
During October, the department operated at 9,500 standard hours, and the factory overhead costs incurred were indirect factory wages, $28,790; power and light,
$17,450; indirect materials, $14,200; supervisory salaries, $17,390; depreciation of plant and equipment, $44,600; and insurance and property taxes, $13,610.
Required:
Prepare a factory overhead cost variance report for October. To be useful for cost control, the budgeted amounts should be based on 9,500 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.
Feeling Better Medical Inc.
Factory Overhead Cost Variance Report-Assembly Department
For the Month Ended October 31
Transcribed Image Text:Normal capacity for the month 9,000 hrs.
Actual production for the month 9,500 hrs.
Variable factory overhead costs:
Indirect factory wages
Power and light
Indirect materials
Feeling Better Medical Inc.
Factory Overhead Cost Variance Report-Assembly Department
For the Month Ended October 31
Total variable cost
Fixed factory overhead costs:
Supervisory salaries
Depreciation of plant and equipment
Insurance and property taxes
Total fixed cost
Total factory overhead cost
Total controllable variances
Volume variance-favorable:
Excess hours used over normal at the standard rate for fixed factory overhead
Budget
Actual (at Actual
Cost Production)
$
Unfavorable Favorable
Variances Variances
100 00
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