Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Antuan Company set the following standard costs for one unit of its product. Direct materials (4.0 Ibs. @ $4.00 per Ib.) $ 16.00 Direct labor

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

Direct materials (4.0 Ibs. @ $4.00 per Ib.) $ 16.00
Direct labor (1.8 hrs. @ $13.00 per hr.) 23.40
Overhead (1.8 hrs. @ $18.50 per hr.) 33.30
Total standard cost $ 72.70

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 23,000
DepreciationMachinery 72,000
Taxes and insurance 17,000
Supervision 252,500
Total fixed overhead costs 364,500
Total overhead costs $ 499,500

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

Direct materials (61,000 Ibs. @ $4.20 per lb.) $ 256,200
Direct labor (23,000 hrs. @ $13.30 per hr.) 305,900
Overhead costs
Indirect materials $ 41,950
Indirect labor 176,200
Power 17,250
Repairs and maintenance 34,500
DepreciationBuilding 23,000
DepreciationMachinery 97,200
Taxes and insurance 15,300
Supervision 252,500 657,900
Total costs $ 1,220,000

image text in transcribedimage text in transcribedimage text in transcribedimage text in transcribed

Flexible Overhead Budgets For Month Ended October 31 Flexible Budget Flexible Budget for 75% of capacity Variable Amount Total Fixed Cost 65% of 85% of apacity apacity per Unit Sales (in units) Variable overhead costs 0.00 0 0 Fixed overhead costs 0 0 Total overhead costs 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 Actual Cost Standard Cost $ $ 0 0 0 EA O 4. Compute the direct labor cost variance, including its rate and efficiency variances. AH Actual Hours SH Standard Hours AR Actual Rate SR Standard Rate Actual Cost Standard Cost $ 0 0 $ 0 0 EA ANTUAN COMPANY Overhead Variance Report For Month Ended October 31 Expected production volume Production level achieved Volume variance Flexible Budget Actual Results Variances Fav. /Unfav. Variable costs Fixed costs Total overhead costs

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Control And Audit In Management Accounting Cima Stage 4

Authors: Jeff Coates, Colin Rickwood, Ray Stacey

1st Edition

0750609958, 978-0750609951

More Books

Students also viewed these Accounting questions

Question

Compare the different types of employee separation actions.

Answered: 1 week ago

Question

Assess alternative dispute resolution methods.

Answered: 1 week ago

Question

Distinguish between intrinsic and extrinsic rewards.

Answered: 1 week ago