5. Prepare a detailed overhead variance report that shows the variances for individual items of overhead. (Indicate the effect of each variance by selecting for favorable, unfavorable, and No variance.)
(The following information applies to the questions displayed below.) Antuan Company set the following standard costs for one unit of its product. Direct materials (4.0 Ibs. @ $4.00 per Ib.) Direct labor (1.6 hrs. @ $13.00 per hr. ) Overhead (1.6 hrs. @ $18.50 per hr.) Total standard cost $16.00 20.80 29.60 $66.40 The predetermined overhead rate ($18.50 per direct labor hour) is based on an expected volume of 75% of the factory's capacity of 20,000 units per month. Following are the company's budgeted overhead costs per month at the 75% capacity level. Overhead Budget (75% Capacity) Variable overhead costs Indirect materials $ 15,000 Indirect labor 75,000 Power 15,000 Repairs and maintenance 30,000 Total variable overhead costs Fixed overhead costs Depreciation-Building 24,000 Depreciation Machinery 71,000 Taxes and insurance 16,000 Supervision 198,000 Total fixed overhead costs Total overhead costs $135,000 309,000 $444,000 The company incurred the following actual costs when it operated at 75% of capacity in October. The company incurred the following actual costs when it operated at 75% of capacity in October. $ 248,050 268,000 Direct materials (60,500 Ibs. @ $4.10 per lb.) Direct labor (20,000 hrs. @ $13.40 per hr.) Overhead costs Indirect materials Indirect labor Power Repairs and maintenance Depreciation-Building Depreciation-Machinery Taxes and insurance Supervision Total costs $ 42,000 176,250 17,250 34,500 24,000 95,850 14,400 198,000 602,250 $1,118,300 5. Prepare a detailed overhead variance report that shows the variances for individual items of overhead. (Indicate the effect of each variance by selecting for favorable, unfavorable, and No variance.) 5. Prepare a detailed overhead variance report that shows the variances for individual items of overhead. (Indicate the effect of each variance by selecting for favorable, unfavorable, and No variance.) ANTUAN COMPANY Overhead Variance Report For Month Ended October 31 Expected production volume Production level achieved 75% of capacity 75% of capacity Volume variance No variance Flexible Budget Actual Results Variances Fav./Unfav. Variable costs Indirect materials Indirect labor $ 15,000 75,000 15,000 30,000 Power Unfavorable Unfavorable Unfavorable Unfavorable Unfavorable Unfavorable Repairs and maintenance Total variable costs 135,000 Fixed costs 24,000 Depreciation-Building Depreciation-Machinery Taxes and insurance Supervision 24,000 71,000 16,000 198,000 O No variance Unfavorable Favorable o Unfavorable Total fixed costs 309,000 24,000 Unfavorable Total overhead costs Unfavorable
