Standard Factory Overhead Variance Report During May, the department operated at

Question

Standard Factory Overhead Variance Report

During May, the department operated at 7,400 standard hours, and the factory overhead costs incurred were indirect factory wages, $23,580; power and light, $13,120; indirect materials, $11,310; supervisory salaries, $12,000; depreciation of plant and equipment, $31,450; and insurance and property taxes, $9,750.

Required:

Prepare a factory overhead cost variance report for May. To be useful for cost control, the budgeted amounts should be based on 7,400 hours. Use the minus sign to enter favorable variances as negative numbers.

Prepare a factory overhead cost variance report for May. To be useful for cost control, the budgeted amounts should be based on 7,400 hours. Use the minus sign to enter favorable variances as negative numbers.

Explanation / Answer

Budget Actual Favorable Variances Unfavorable Variances Variable Costs Indirect Factory Wages 23310 23580 270 Power and Light 13320 13120 -200 Indirect Materials 11100 11310 210 Total Variable Costs 47730 48010 Fixed Costs Supervisory Salaries 12000 12000 Depreciation of P & E 31450 31450 Insurance and Property Taxes 9750 9750 Total Fixed Costs 53200 53200 Total Controllable Variances -200 480 Net Controllable Variance - Favorable -200 Net Controllable Variance - Unfavorable 480 Excess Hours Used Over the Normal at the Standard Rate -3040 Total Cost Variance -2760

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