Tiger Equipment Inc. Factory Overhead Cost Variance Report—Welding Department For the Month Ended May 31 1 Normal capacity for the month 8,400 hours 2 Actual production for the month 8,860 hours 3 4 Budget Actual Variances: Favorable Variances: Unfavorable 5 Variable costs: 6 indirect factory wages 31,896 32,400 504 7 power and light 21,264 21,000 -264 8 indirect materials 17,720 18,250 530 9 total variable cost 70,880 71,650 10 Fixed costs: 11 supervisor salaries 20,000 20,000 12 depr. of plant and equipment 36,200 36,200 13 insurance and property taxes 15,200 15,200 14 total fixed costs 71,400 71,400 15 total factory overhead cost 142,280 143,050 16 total controllable variances -264 1034 17 18 Net controllable variances-unfavorable 770 19 Volume variance-favorable ? 20 Total factory overhead cost variance-favorable ?
Tiger Equipment Inc. Factory Overhead Cost Variance Report—Welding Department For the Month Ended May 31 1 Normal capacity for the month 8,400 hours 2 Actual production for the month 8,860 hours 3 4 Budget Actual Variances: Favorable Variances: Unfavorable 5 Variable costs: 6 indirect factory wages 31,896 32,400 504 7 power and light 21,264 21,000 -264 8 indirect materials 17,720 18,250 530 9 total variable cost 70,880 71,650 10 Fixed costs: 11 supervisor salaries 20,000 20,000 12 depr. of plant and equipment 36,200 36,200 13 insurance and property taxes 15,200 15,200 14 total fixed costs 71,400 71,400 15 total factory overhead cost 142,280 143,050 16 total controllable variances -264 1034 17 18 Net controllable variances-unfavorable 770 19 Volume variance-favorable ? 20 Total factory overhead cost variance-favorable ?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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.
Topic Video
Question
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Tiger Equipment Inc.
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For the Month Ended May 31
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1
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Normal capacity for the month
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8,400 hours
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2
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Actual production for the month
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8,860 hours
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3
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4
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Budget
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Actual
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Variances: Favorable
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Variances: Unfavorable
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5
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Variable costs:
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6
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indirect factory wages
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31,896
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32,400
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504
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7
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power and light
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21,264
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21,000
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-264
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8
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indirect materials |
17,720
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18,250
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530
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9
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total variable cost
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70,880
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71,650
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10
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Fixed costs:
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11
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supervisor salaries
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20,000
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20,000
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12
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depr. of plant and equipment
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36,200
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36,200
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13
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insurance and property taxes
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15,200
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15,200
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14
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total fixed costs
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71,400
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71,400
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15
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total factory overhead cost
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142,280
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143,050
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16
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total controllable variances
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-264
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1034
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17
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18
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Net controllable variances-unfavorable
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770
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19
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Volume variance-favorable
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?
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20
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Total factory overhead cost variance-favorable
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? | |
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