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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 | |||
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
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