The controllable variance

The controllable variance is $770 U.Flt 13-“. Factory overhead cost variance report our. 4 Tiger Equipment inc., a manufacturer of construction equipment, prepared the follow-ing factory overhead cost budget for the Welding Department for May of the currentyear. The company expected to operate the department at 100% of normal capacity of3,400 hours. 1tiariahle costs:Indirect factory wages 5303410P’DWET and light 20.]60Indirect materials 16,300Total variable cost 5 51,200Fixed costs:Supervisory salaries $20,000Depreciation of plant and equipment 35,200In surance and property taxes 15,200Total ?xed cost H.400Total factory overhead cost $133,600 During May, the department operated at 3,360 standard hours. The factory overheadcosts incurred were indirect Factory wages, $52,400; power and light, $21,000; indirect materials, $10,250; supervisory saiaries, $20,000; depreciation of plant and equipment,$56,200; and insurance and property taxes, $15,200. Instr-u ctions Prepare a factory overhead cost variance report for May. To he useful for cost control,the budgeted amounts should be based on 5,860 hours.

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