Question

Seabury, Inc., a manufacturer of disposable medical supplies, prepared the following factory overhead cost budget for the Assembly Department for October. The company expected to operate the department at 100% of normal capacity of 25,000 hours. Variable costs: Indirect factory wages $150,000 Power and light 29,500 Indirect materials 17,000 Total variable cost $196,500 Fixed costs: Supervisory salaries $125,000 Depreciation of plant and equipment 49,000 Insurance and property taxes 29,750 Total fixed cost 203,750 Total factory overhead cost $400,250 During October, the department operated at 23,500 hours, and the factory overhead costs incurred were indirect factory wages, $140,500; power and light, $28,600; indirect materials, $15,220; supervisory salaries, $125,000; depreciation of plant and equipment, $49,000; and insurance and property taxes, $29,750. Required: Prepare a factory overhead cost variance report for October. To be useful for cost control, the budgeted amounts should be based on 23,500 hours. Enter favorable variances as negative amounts, and unfavorable variances as positive amounts. Enter all other amounts as positive numbers. If an answer box does not require an entry, leave it blank or enter zero "0". Seabury Inc. Factory Overhead Cost Variance Report-Assembly Department For the Month Ended October 31 Normal capacity for the month 25,000 hrs. Actual production for the month 23,500 hrs. Actual Budget Variance Unfavorable Variance Favorable Variable costs: Insurance and property taxes $fill in the blank 2 $fill in the blank 3 $fill in the blank 4 $fill in the blank 5 Power and light fill in the blank 7 fill in the blank 8 fill in the blank 9 fill in the blank 10 Depreciation of plant and equipment fill in the blank 12 fill in the blank 13 fill in the blank 14 fill in the blank 15 Total variable cost $fill in the blank 16 $fill in the blank 17 Fixed costs: $fill in the blank 19 $fill in the blank 20 fill in the blank 21 fill in the blank 22 fill in the blank 24 fill in the blank 25 fill in the blank 26 fill in the blank 27 fill in the blank 29 fill in the blank 30 fill in the blank 31 fill in the blank 32 Total fixed cost $fill in the blank 33 $fill in the blank 34 fill in the blank 35 fill in the blank 36 Total factory overhead cost $fill in the blank 37 $fill in the blank 38 fill in the blank 39 fill in the blank 40 Total controllable variances $fill in the blank 41 $fill in the blank 42 $fill in the blank 44 Idle hours at the standard rate for fixed factory overhead fill in the blank 46 Total factory overhead cost variance-unfavorable

Answer 1

	Static Budget	Dividend by 25000	Per hour	Multiply: actual hours	Flexiable budget
Indirect factory wages	150,000	25,000	6.00	23,500	141,000
Power and light	29,500	25,000	1.18	23,500	27,730
Indirect materials	17,000	25,000	0.68	23,500	15,980