Prepare a factory overhead cost variance report for may to

Reference no: EM13589202

A manufacturer of construction equipment, prepared the following factory overhead cost budget for the Welding Department for May 2014. The company expected to operate the department at 100% of normal capacity of 8,400 hours.

Variable costs:
Indirect factory wages	$25,200
Power and light	17,808
Indirect materials	14,448
Total variable cost		$57,456
Fixed costs:
Supervisory salaries	$15,460
Depreciation of plant and equipment	39,650
Insurance and property taxes	12,090
Total fixed cost		67,200
Total factory overhead cost		$124,656

During May, the department operated at 8,900 standard hours, and the factory overhead costs incurred were indirect factory wages, $26,970; power and light, $18,530; indirect materials, $15,600; supervisory salaries, $15,460; depreciation of plant and equipment, $39,650; and insurance and property taxes, $12,090.

Required:

Prepare a factory overhead cost variance report for May. To be useful for cost control, the budgeted amounts should be based on 8,900 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

Reference no: EM13589202

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