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 5,000 hours. Variable costs: Indirect factory wages Power and light Indirect materials Total variable cost Fixed costs: $17,000 10,150 8,150 Supervisory salaries Depreciation of plant and equipment Insurance and property taxes Total fixed cost Total factory overhead cost During October, the department operated at 5,300 standard hours, and the factory overhead costs incurred were indirect factory wages, $18,200; power and light, $10,570; indirect materials, $8,800; supervisory salaries, $10,350; depreciation of plant and equipment, $26,550; and insurance and property taxes, $8,100. Required: Normal capacity for the month 5,000 hrs. Actual production for the month 5,300 hrs. $35,300 $10,350 26,550 8,100 45,000 $45,000 Prepare a factory overhead cost variance report for October. To be useful for cost control, the budgeted amounts should be based on 5,300 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
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 5,000 hours. Variable costs: Indirect factory wages Power and light Indirect materials Total variable cost Fixed costs: $17,000 10,150 8,150 Supervisory salaries Depreciation of plant and equipment Insurance and property taxes Total fixed cost Total factory overhead cost During October, the department operated at 5,300 standard hours, and the factory overhead costs incurred were indirect factory wages, $18,200; power and light, $10,570; indirect materials, $8,800; supervisory salaries, $10,350; depreciation of plant and equipment, $26,550; and insurance and property taxes, $8,100. Required: Normal capacity for the month 5,000 hrs. Actual production for the month 5,300 hrs. $35,300 $10,350 26,550 8,100 45,000 $45,000 Prepare a factory overhead cost variance report for October. To be useful for cost control, the budgeted amounts should be based on 5,300 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
Chapter1: Financial Statements And Business Decisions
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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 5,000 hours.
Variable costs:
Indirect factory wages
Power and light
Indirect materials
Total variable cost
Fixed costs:
Supervisory salaries
Depreciation of plant and equipment
$17,000
10,150
8,150
Normal capacity for the month 5,000 hrs.
Actual production for the month 5,300 hrs.
$10,350
26,550
8,100
Insurance and property taxes
Total fixed cost
Total factory overhead cost.
During October, the department operated at 5,300 standard hours, and the factory overhead costs incurred were indirect factory wages, $18,200; power and light,
$10,570; indirect materials, $8,800; supervisory salaries, $10,350; depreciation of plant and equipment, $26,550; and insurance and property taxes, $8,100.
Required:
$35,300
Check My Work 3 more Check My Work uses remaining
Prepare a factory overhead cost variance report for October. To be useful for cost control, the budgeted amounts should be based on 5,300 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.
45,000
$45,000
Feeling Better Medical Inc.
Factory Overhead Cost Variance Report-Assembly Department
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Transcribed Image Text:eBook
Normal capacity for the month 5,000 hrs.
Actual production for the month 5,300 hrs.
Print Item
Feeling Better Medical Inc.
Factory Overhead Cost Variance Report-Assembly Department
For the Month Ended October 31
Line Item Description
Variable factory overhead costs:
Indirect factory wages
Power and light
Indirect materials
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
Net controllable variance favorable
Volume variance-favorable:
Excess hours used over normal at the standard rate for fixed factory overhead
total factory overheads
dance-vn favorable
Actual
Cost
Budget
(at Actual Unfavorable
Production) Variances
100000
Favorable
Variances
88
010 001
10
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