Question: Tiger Equipment Inc a manufacturer of construction equipment prepared the

Tiger Equipment Inc., a manufacturer of construction equipment, prepared the following factory overhead cost budget for the Welding Department for May 2014. The company expected to operate the department at 100% of normal capacity of 8,400 hours.

During May, the department operated at 8,860 standard hours, and the factory overhead costs incurred were indirect factory wages, $ 32,400; power and light, $ 21,000; indirect materials, $ 18,250; supervisory salaries, $ 20,000; depreciation of plant and equipment, $ 36,200; and insurance and property taxes, $ 15,200.

Prepare a factory overhead cost variance report for May. To be useful for cost control, the budgeted amounts should be based on 8,860hours.
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  • CreatedJune 27, 2014
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