Construct a factory overhead cost variance report for the Trim Department for July. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive nu Tannin Products Inc. Factory Overhead Cost Variance Report-Trim Department For the Month Ended July 31 Productive capacity for the month 14,000 hrs. Actual productive capacity used for the month 9,000 hrs. Actual Budget (at actual production) Unfavorable Variances Favorable Variances Variable factory overhead costs: Indirect factory labor Power and light Indirect materials Total variable factory overhead cost Fixed factory overhead costs: Supervisory salaries Depreciation of plant and equipment Insurance and property taxes Total fixed factory overhead cost Total factory overhead cost Total controllable variances Idle hours at the standard rate for fixed factory overhead:

Variance Analysis is one of the important tool for the cost control and for the achievement of the set targets. A Budget/Standards are Created and those are compared with the Actual So that if any Variance which are unfavorable a Corrective Action can be Initiated. Variable Factory overhead Costs Actual Budget Favorable Unfavorable Indirect Factory Labor (33,000/10,000 x 9,000) 28,960 29,700 740 Power and Light (7,400/10,000 x 9,000) 6,540 6,660 120 Indirect Materials (13,000/10,000 x 9,000) 12,300 11,700 600 Total Variable Factory overhead cost 47,800 48,060 Fixed Factory ovehead costs Supervisory Salaries 46,280 46,280 Depreciation of Plant and Equipment 12,180 12,180 Insurance and Property taxes 22,740 22,740 Total Fixed Factory overhead cost 81,200 81,200 Total Controllable Variances 860 600 Net Controllable variance -Favorable 260 Volume variance- Unfavorable Idle Hours at the Standard Rate for Fixed Factory Overhead ((14,000 - 9,000)81200/14000) 29,000 Total Factory Overhead cost Variance-Unfavorable 28,740