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.
| Variable costs: |
|
|
| Indirect factory wages |
$25,200 |
|
| Power and light |
17,808 |
|
| Indirect materials |
14,448 |
|
| Total variable cost |
|
$57,456 |
| Fixed costs: |
|
|
| Supervisory salaries |
$15,460 |
|
| Depreciation of plant and equipment |
39,650 |
|
| Insurance and property taxes |
12,090 |
|
| Total fixed cost |
|
67,200 |
| Total factory overhead cost |
|
$124,656 |
During May, the department operated at 8,900 standard hours, and the factory overhead costs incurred were indirect factory wages, $26,970; power and light, $18,530; indirect materials, $15,600; supervisory salaries, $15,460; depreciation of plant and equipment, $39,650; and insurance and property taxes, $12,090.
Required:
Prepare a factory overhead cost variance report for May. To be useful for cost control, the budgeted amounts should be based on 8,900 hours. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number. Round your per unit computations to the nearest cent, if required