Med-Tech Company, a manufacturer of disposable medical supplies, prepared the following factory overhead cost budget for the Assembly Department for August 2008. The company expected to operate the department at 100% of normal capacity of 28,000 hours.

During August, the department operated at 25,250 hours, and the factory overhead costs incurred were indirect factory wages, $216,500; power and light, $162,600; indirect materials, $38,200; supervisory salaries, $130,000; depreciation of plant and equipment, $105,000; and insurance and property taxes, $22,600.

Instructions
Prepare a factory overhead cost variance report for August. To be useful for cost control, the budgeted amounts should be based on 25,250hours.

Transcribed Image Text:

Variable costs: Indirect factory wages Power and light Indirect materials $246,400 179,200 44,800 Total variable cost $470,400 Fixed costs: Supervisory salaries Depreciation of plant and equipment Insurance and property taxes $130,000 105,000 22,600 Total fixed cost 257,600 $728,000 Total factory overhead cost