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Antuan Company set the following standard costs for one unit of its product. Direct materials (4.0 Ibs. @ $6.00 per Ib.) $ 24.00 Direct labor

Antuan Company set the following standard costs for one unit of its product.

Direct materials (4.0 Ibs. @ $6.00 per Ib.) $ 24.00
Direct labor (2.0 hrs. @ $13.00 per hr.) 26.00
Overhead (2.0 hrs. @ $18.50 per hr.) 37.00
Total standard cost $ 87.00

The predetermined overhead rate ($18.50 per direct labor hour) is based on an expected volume of 75% of the factorys capacity of 20,000 units per month. Following are the companys 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 $ 135,000
Fixed overhead costs
DepreciationBuilding 24,000
DepreciationMachinery 70,000
Taxes and insurance 17,000
Supervision 309,000
Total fixed overhead costs 420,000
Total overhead costs $ 555,000

The company incurred the following actual costs when it operated at 75% of capacity in October.

Direct materials (60,500 Ibs. @ $6.20 per lb.) $ 375,100
Direct labor (23,000 hrs. @ $13.30 per hr.) 305,900
Overhead costs
Indirect materials $ 41,100
Indirect labor 176,350
Power 17,250
Repairs and maintenance 34,500
DepreciationBuilding 24,000
DepreciationMachinery 94,500
Taxes and insurance 15,300
Supervision 309,000 712,000
Total costs $ 1,393,000

rev: 03_28_2018_QC_CS-122864

3. Compute the direct materials cost variance, including its price and quantity variances. AQ = Actual Quantity SQ = Standard Quantity AP = Actual Price SP = Standard Price

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