Prepare a factory overhead cost variance report for october

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Question - The Finishing Department of Paragon Manufacturing Co. prepared the following factory overhead cost budget for October of the current year, during which it expected to operate at a 100% capacity of 10,000 machine hours:

Variable cost:



Indirect factory wages

$18,000


Power and light

12,000


Indirect materials

4,000


Total variable cost


$34,000

Fixed cost:



Supervisory salaries

$12,000


Depreciation of plant and



equipment

8,800


Insurance and property taxes

3,200


Total fixed cost


24,000

Total factory overhead


$58,000

During October, the plant was operated for 9,000 machine hours and the factory overhead costs incurred were as follows: indirect factory wages, $16,400; power and light, $10,000; indirect materials, $3,000; supervisory salaries, $12,000; depreciation of plant and equipment, $8,800; insurance and property taxes, $3,200.

Prepare a factory overhead cost variance report for October.

Reference no: EM132032402

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