Antuan Company set the following standard costs for one unit of its product. Required: 1&2. Prepare flexible overhead budgets for October showing the amounts of each variable and fixed cost at the 65%, 75%, and 85% capacity levels and classify all items listed in the fixed budget as variable or fixed. Direct materials (5.0 lbs. @ $5.00 per lb.) Direct labor (1.7 hrs. @ $12.00 per hr.) Overhead (1.7 hrs. @ $18.50 per hr.) Total standard cost $25.00 20.40 31.45 $76.85 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. ANTUAN COMPANY Flexible Overhead Budgets For Month Ended October 31 Flexible Budget Flexible Budget for Variable Amount Total Fixed 65% of 75% of per Unit Cost capacity capacity 13,000 15,000 85% of capacity 17,000 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 18,000 Supervision 223,750 Total fixed overhead costs Total overhead costs $135,000 Sales (in units) Variable overhead costs Indirect labor Indirect materials Power Repairs and maintenance 1.00 336,750 $ 471,750 $ 1.00 00 The company incurred the following actual costs when it operated at 75% of capacity in October. Total variable costs Fixed overhead costs Depreciation Building DepreciationMachinery Taxes and insurance $ $ 385,050 268,400 24,000 71,000 18,000 223,750 Supervision Direct materials (75,500 lbs. @ $5.10 per lb.) Direct labor (22,000 hrs. @ $12.20 per hr.) Overhead costs Indirect materials Indirect labor Power Repairs and maintenance Depreciation-Building Depreciation-Machinery Taxes and insurance Supervision Total costs $ 41,400 176,800 17,250 34,500 24,000 95,850 16,200 223,750 336,750 0 1 Total fixed costs Total overhead costs 629,750 $ 1,283,200 Required information (The following information applies to the questions displayed below.) Antuan Company set the following standard costs for one unit of its product. Direct materials (5.0 Ibs. @ $5.00 per Ib.) Direct labor (1.7 hrs. @ $12.00 per hr.) Overhead (1.7 hrs. @ $18.50 per hr.) Total standard cost $25.00 20.40 31.45 $76.85 The predetermined overhead rate ($18.50 per direct labor hour) is based on an expected volum capacity of 20,000 units per month. Following are the company's budgeted overhead costs per 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 18,000 Supervision 223,750 Total fixed overhead costs Total overhead costs $135,000 336,750 $471, 750 The company incurred the following actual costs when it operated at 75% of capacity in October $ 385,950 268,400 Direct materials (75,500 Ibs. $5.10 per lb.) Direct labor (22,000 hrs. $12.20 per hr.) Overhead costs Indirect materials Indirect labor Power Repairs and maintenance Depreciation-Building Depreciation Machinery Taxes and insurance Supervision Total costs $ 41,400 176,800 17,250 34,500 24,000 95,850 16,200 223,758 629,750 $1,283,200 Required: 1&2. Prepare flexible overhead budgets for October showing the amounts of each variable and fixed cost att capacity levels and classify all items listed in the fixed budget as variable or fixed. ANTUAN COMPANY Flexible Overhead Budgets For Month Ended October 31 Flexible Budget Variable Amount Total Fixed 65% of Flexible Budget for 75% of 85% of
