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  • Med-Tech Company Factory Overhead Cost Variance Report-Assembly Department For The Month Ended August 31, 2008

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    The factory overhead cost variance report for the assembly department showed: 1) Actual production hours were lower than planned capacity, resulting in an unfavorable volume variance of $25,300. 2) Variable overhead costs were $7,900 under budget with favorable variances for indirect wages and materials, but an unfavorable variance for power and light of $1,000. 3) Total fixed overhead was on budget but the overall factory overhead cost variance was unfavorable by $18,400 due to lower production volume.

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    The factory overhead cost variance report for the assembly department showed: 1) Actual production hours were lower than planned capacity, resulting in an unfavorable volume variance of $25,300. 2) Variable overhead costs were $7,900 under budget with favorable variances for indirect wages and materials, but an unfavorable variance for power and light of $1,000. 3) Total fixed overhead was on budget but the overall factory overhead cost variance was unfavorable by $18,400 due to lower production volume.

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    17 views1 page

    Med-Tech Company Factory Overhead Cost Variance Report-Assembly Department For The Month Ended August 31, 2008

    Uploaded by

    richmiddle
    The factory overhead cost variance report for the assembly department showed: 1) Actual production hours were lower than planned capacity, resulting in an unfavorable volume variance of $25,300. 2) Variable overhead costs were $7,900 under budget with favorable variances for indirect wages and materials, but an unfavorable variance for power and light of $1,000. 3) Total fixed overhead was on budget but the overall factory overhead cost variance was unfavorable by $18,400 due to lower production volume.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as XLSX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as xlsx, pdf, or txt
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    MED-TECH COMPANY

    Factory Overhead Cost Variance Report—Assembly Department


    For the Month Ended August 31, 2008

    Productive capacity for the month (100% of normal) 28,000 hours


    Actual production for the month 25,250 hours

    Variances
    Budget Actual Favorable Unfavorable
    Variablen factory overhead costs:
    Indirect factory wages $222,200 $216,500 $ 5,700
    Power and light 161,600 162,600 $ 1,000
    Indirect materials 40,400 38,200 2200
    Total variable factory
    overhead cost $ 424,200 $ 417,300
    Fixed factory overhead costs:
    Supervisory salaries $ 130,000 $ 130,000
    Depreciation of plant
    and equiment 105,000 105,000
    Insurance and property taxes 22,600 22,600
    Total fixed factory
    overhead cost $ 257,600 $ 257,600
    Total factory overhead cost $ 681,800 $ 674,900
    Total controllable variances $ 7,900 $ 1000

    Net controllable variance- favorable $ 6,900


    Volume variance- unfavorable
    Capacity not used at the standard rate for fixed 25,300
    factory overhead (28,000 hrs - 25,250 hrs) x $9.20
    Total factory overhead cost variance- unfavorable $ 18,400

    $9.20= $257,600/28,000 hours

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