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Reference no: EM13598680

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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

Reference no: EM13598680

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