Tiger Equipment Inc., a manufacturer of construction equipment, prepared the fol
ID: 2466561 • Letter: T
Question
Tiger Equipment Inc., a manufacturer of construction equipment, prepared the following factory overhead cost budget for the Welding Department for May of the current year. The company expected to operate the department at 100% of normal capacity of 8,700 hours.
TIGER EQUIPMENT INC.
Factory Overhead Cost Budget—Welding Department
For the Month Ended May 31
1
Variable costs:
2
Indirect factory wages
$40,020.00
3
Power and light
20,880.00
4
Indirect materials
17,400.00
5
Total variable cost
$78,300.00
6
Fixed costs:
7
Supervisory salaries
$19,800.00
8
Depreciation of plant and equipment
35,700.00
9
Insurance and property taxes
18,450.00
10
Total fixed cost
73,950.00
11
Total factory overhead cost
$152,250.00
During May, the department operated at 9,080 standard hours, and the factory overhead costs incurred were indirect factory wages, $42,268; power and light, $22,064; indirect materials, $18,700; supervisory salaries, $19,800; depreciation of plant and equipment, $35,700; and insurance and property taxes, $18,450.
Prepare a factory overhead cost variance report for May. To be useful for cost control, the budgeted amounts should be based on 9,080 hours. Refer to the Amount Descriptions list provided for the exact wording of the answer choices for text entries. Enter favorable variances as negative amounts.
Factory Overhead Cost Variance Report
Shaded cells have feedback.
Prepare a factory overhead cost variance report for May. To be useful for cost control, the budgeted amounts should be based on 8,860 hours. Refer to the Amount Descriptions list provided for the exact wording of the answer choices for text entries. Enter favorable variances as negative amounts.
Score: 106/174
TIGER EQUIPMENT INC.
Factory Overhead Cost Budget - Welding Department
For the Month Ended May 31
1
Productive capacity for the month
8,700 hours
2
Actual production for the month
9,080 hours
3
4
Budget (at Actual Production)
Actual
Variances: Favorable
Variances: Unfavorable
5
Variable factory overhead costs:
6
7
8
9
10
Fixed factory overhead costs:
11
12
13
14
15
16
17
18
19
20
TIGER EQUIPMENT INC.
Factory Overhead Cost Budget—Welding Department
For the Month Ended May 31
Explanation / Answer
TIGER EQUIPMENT INC. Factory Overhead Cost Budget - Welding Department For the Month Ended May 31 Productive capacity for the month 8,700 hours Actual production for the month 9,080 hours Budget (at Actual Production) Actual Variances: Favorable Variances: Unfavorable Variable factory overhead costs: Indirect Factory Wages 41768 42268 500 Power and Light 21792 220164 272 Indirect Material 18160 18700 540 Total Variable cost 81720 83032 1312 Fixed factory overhead costs: Supervisory Salaries 19800 19800 Depreciation of Plant and Machinery 35700 35700 Insurance and Property taxes 18450 18450 Total Fixed cost 73950 73950 Total Factory Overhead cost 155670 156982