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 7,300 hours. Variable costs: Indirect factory wages $23,360 Power and light 13,724 Indirect materials 10,804 Total variable cost $47,888 Fixed costs: Supervisory salaries $14,610 Depreciation of plant and equipment 37,470 Insurance and property taxes 11,430 Total fixed cost 63,510 Total factory overhead cost $111,398 During May, the department operated at 7,700 standard hours. The factory overhead costs incurred were indirect factory wages, $24,890; power and light, $14,220; indirect materials, $11,600; supervisory salaries, $14,610; depreciation of plant and equipment, $37,470; and insurance and property taxes, $11,430. Required: Prepare a factory overhead cost variance report for May. To be useful for cost control, the budgeted amounts should be based on 7,700 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. Tiger Equipment Inc. Factory Overhead Cost Variance Report—Welding Department For the Month Ended May 31 Normal capacity for the month 7,300 hrs. Actual production for the month 7,700 hrs. Actual Budget Unfavorable Variances Favorable Variances Variable costs: Indirect factory wages $fill in the blank $fill in the blank $fill in the blank $fill in the blank Power and light fill in the blank fill in the blank fill in the blank fill in the blank Indirect materials fill in the blank fill in the blank fill in the blank fill in the blank Total variable cost $fill in the blank $fill in the blank Fixed costs: Supervisory salaries $fill in the blank $fill in the blank Depreciation of plant and equipment fill in the blank fill in the blank Insurance and property taxes fill in the blank fill in the blank Total fixed cost $fill in the blank $fill in the blank Total factory overhead cost $fill in the blank $fill in the blank Total controllable variances $fill in the blank $fill in the blank fill in the blank $fill in the blank fill in the blank Excess hours used over normal at the standard rate for fixed factory overhead fill in the blank fill in the blank $fill in the blank

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 7,300 hours. Variable costs: Indirect factory wages $23,360 Power and light 13,724 Indirect materials 10,804 Total variable cost $47,888 Fixed costs: Supervisory salaries $14,610 Depreciation of plant and equipment 37,470 Insurance and property taxes 11,430 Total fixed cost 63,510 Total factory overhead cost $111,398 During May, the department operated at 7,700 standard hours. The factory overhead costs incurred were indirect factory wages, $24,890; power and light, $14,220; indirect materials, $11,600; supervisory salaries, $14,610; depreciation of plant and equipment, $37,470; and insurance and property taxes, $11,430. Required: Prepare a factory overhead cost variance report for May. To be useful for cost control, the budgeted amounts should be based on 7,700 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. Tiger Equipment Inc. Factory Overhead Cost Variance Report—Welding Department For the Month Ended May 31 Normal capacity for the month 7,300 hrs. Actual production for the month 7,700 hrs. Actual Budget Unfavorable Variances Favorable Variances Variable costs: Indirect factory wages $fill in the blank $fill in the blank $fill in the blank $fill in the blank Power and light fill in the blank fill in the blank fill in the blank fill in the blank Indirect materials fill in the blank fill in the blank fill in the blank fill in the blank Total variable cost $fill in the blank $fill in the blank Fixed costs: Supervisory salaries $fill in the blank $fill in the blank Depreciation of plant and equipment fill in the blank fill in the blank Insurance and property taxes fill in the blank fill in the blank Total fixed cost $fill in the blank $fill in the blank Total factory overhead cost $fill in the blank $fill in the blank Total controllable variances $fill in the blank $fill in the blank fill in the blank $fill in the blank fill in the blank Excess hours used over normal at the standard rate for fixed factory overhead fill in the blank fill in the blank $fill in the blank

FINANCIAL ACCOUNTING

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ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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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 7,300 hours.

Variable costs:
Indirect factory wages	$23,360
Power and light	13,724
Indirect materials	10,804
Total variable cost		$47,888
Fixed costs:
Supervisory salaries	$14,610
Depreciation of plant and equipment	37,470
Insurance and property taxes	11,430
Total fixed cost		63,510
Total factory overhead cost		$111,398

During May, the department operated at 7,700 standard hours. The factory overhead costs incurred were indirect factory wages, $24,890; power and light, $14,220; indirect materials, $11,600; supervisory salaries, $14,610; depreciation of plant and equipment, $37,470; and insurance and property taxes, $11,430.

Required:

Prepare a factory overhead cost variance report for May. To be useful for cost control, the budgeted amounts should be based on 7,700 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.

Tiger Equipment Inc.

Factory Overhead Cost Variance Report—Welding Department

For the Month Ended May 31

Normal capacity for the month 7,300 hrs.
Actual production for the month 7,700 hrs.
	Actual	Budget	Unfavorable Variances	Favorable Variances
Variable costs:
Indirect factory wages	$fill in the blank	$fill in the blank	$fill in the blank	$fill in the blank
Power and light	fill in the blank	fill in the blank	fill in the blank	fill in the blank
Indirect materials	fill in the blank	fill in the blank	fill in the blank	fill in the blank
Total variable cost	$fill in the blank	$fill in the blank
Fixed costs:
Supervisory salaries	$fill in the blank	$fill in the blank
Depreciation of plant and equipment	fill in the blank	fill in the blank
Insurance and property taxes	fill in the blank	fill in the blank
Total fixed cost	$fill in the blank	$fill in the blank
Total factory overhead cost	$fill in the blank	$fill in the blank
Total controllable variances			$fill in the blank	$fill in the blank
fill in the blank			$fill in the blank
fill in the blank
Excess hours used over normal at the standard rate for fixed factory overhead				fill in the blank
fill in the blank				$fill in the blank

Definition Definition Measure used to estimate the difference between the budgeted and annual proportion for a specific accounting year. A favorable budget variance refers to positive variances or gains, while unfavorable or negative variances refer to a shortfall in the budget. A budget variance is indicative of the instances where the actual costs incurred are higher or lower than the estimated costs.

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