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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.
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.In your computation round the factory overhead rates to two decimal places. Enter all amounts as positive numbers. If an amount box does not require an entry, leave it blank.
BIO-CARE, INC.
- Factory Overhead Cost Variance Report- Assembly Department
- For the Month Ending March 31, 2010
- Normal capacity for the month: 18,000 hrs.
- Actual production for the month: 16,900 hrs.
Budget Actual Variance Favorable Unfavorable
- Variable costs:
- Indirect factory wages
- Power and light
- Indirect materials
- Total variable cost
- Fixed costs:
- Supervisory salaries
- Depreciation of plant and equipment
- Insurance and property taxes
- Total fixed cost
- Total factory overhead cost
- Total controllable variances
- Net controllable variance
- Volume variance
- Total factory overhead cost variance