Instructions Tiger Equipment Inc., a manufacturer of construction equipment, pre
ID: 2466851 • Letter: I
Question
Instructions
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.
Question not attempted.
TIGER EQUIPMENT INC.
Factory Overhead Cost Budget—Welding Department
For the Month Ended May 31
1
Variable costs:
2
Indirect factory wages
$44,370.00
3
Power and light
21,750.00
4
Indirect materials
17,400.00
5
Total variable cost
$83,520.00
6
Fixed costs:
7
Supervisory salaries
$19,200.00
8
Depreciation of plant and equipment
35,200.00
9
Insurance and property taxes
19,550.00
10
Total fixed cost
73,950.00
11
Total factory overhead cost
$157,470.00
During May, the department operated at 9,120 standard hours, and the factory overhead costs incurred were indirect factory wages, $47,092; power and light, $23,100; indirect materials, $18,850; supervisory salaries, $19,200; depreciation of plant and equipment, $35,200; and insurance and property taxes, $19,550.
Prepare a factory overhead cost variance report for May. To be useful for cost control, the budgeted amounts should be based on 9,120 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.
none
X
Amount Descriptions
Amount Descriptions
Depreciation of plant and equipment
Indirect factory wages
Indirect materials
Insurance and property taxes
Net controllable variance-favorable
Net controllable variance-unfavorable
Power and light
Supervisory salaries
Total controllable variances
Total factory overhead cost
Total factory overhead cost variance-favorable
Total factory overhead cost variance-unfavorable
Total fixed factory overhead cost
Total variable factory overhead cost
Volume variance-favorable
Volume variance-unfavorable
TIGER EQUIPMENT INC.
Factory Overhead Cost Budget—Welding Department
For the Month Ended May 31
Explanation / Answer
Standard Variable Factory Cost = $83520/8700*9120
= $87552
Standard Fixed Factory Cost = $73950
Actual Variable cost:
Actual Fixed overhead:
Total factory overhead cost = $89042+ $73950
= $162992
Variable overhead variance = STandard Variable cost - Actual Variable cost
=$87552 - 89042
= 1490 U
Fixed Overhead Variance = Standard Fixed cost - Actual Fixed cost
=$73950 - $ $73950
= 0
So Total overhead variance = $1490 U
Particulars Amount indirect factory wages 47092 power and light 23100 indirect materials 18850 Total 89042