Standard factory overhead variance report
Bio-Care, Inc., a manufacturer of disposable medical supplies, prepared the following factory overhead cost budget for the Assembly Department for March 2010. The company expected to operate the department at 100% of normal capacity of 18,000 hours.
Variable Cost |
|
Indirect factory wages |
135,000 |
Power and lights |
93,600 |
Indirect materials |
25,200 |
Total variable cost |
253,800 |
Fixed cost |
|
Supervisory salaries |
72,000 |
Depreciation of plant & equip |
51,500 |
Insurance & property tax |
24,100 |
Total fixed cost |
147,600 |
Total factory overhead cost |
401,400 |
During March, the department operated at 16,900 hours, and the factory overhead costs incurred were indirect factory wages, $126,320; power and light, $88,110; indirect materials, $23,220; supervisory salaries, $72,000; depreciation of plant and equipment, $51,500; and insurance and property taxes, $24,100.
Instructions:
Prepare a factory overhead cost variance report for March. To be useful for cost control, the budgeted amounts should be based on 16,900 hours.