Reference no: EM132755704

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.

Required - Prepare factory overhead cost variance report for October.