Antuan Company set the following standard costs for one unit of its product. Direct materials (4.0 Ibs. $6.00 per Ib.) Direct labor (2.0 hrs. $12.00 per hr.) Overhead (2.0 hrs. $18.50 per hr.) Total standard cost $24.00 24.00 37.00 SB5.00 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 (751 Capacity) Variable overhead costs Indirect materials $ 15,000 Indirect labor 75,000 Power 15,000 Repairs and maintenance 45,000 Total variable overhead costs Fixed overhead costs Depreciation-Building Depreciation Machinery 70,000 Taxes and insurance Supervision Total fixed overhead costs Total overhead costs The company incurred the following actual costs when it operated at 75% of capacity in October Direct materials (61,000 Ibe 6 .20 per 1b.) $12.50 per Direct labor (21,000 hrs. Overhead costs Indirect materials Indirect labor 51,750 24,000 Hepairs and maintenance Depreciation Building Depreciation Machinery Taxes and insurance Supervision Total costs 14,400 295,000 715,050 $1.351.550 Required: 1&2. Prepare flexible overhead budgets for October showing the amounts of each variable and fixed cost at the 65%, 75%, Pro $ Direct materiais (61,000 lbs. 56.20 per 1b.) Direct labor (21,000 hrs. $12.30 per hr.) Overhead coats Indirect materiala Indirect labor 370,200 258,300 Repairs and maintenance Depreciation-building Depreciation Machinery Taxes and insurance Supervision Total coats $ 41,650 176,500 17,250 51,750 24.000 94.500 14,400 295,000 715,050 $1,351,550 Required: 182. 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. ANTUAN COMPANY Flexible Overhead Budgets For Month Ended October 31 Flexible Budget Variable Amount Total Fixed 65% of Flexible Budget for 85% of Sales in units) Variable overhead costs Indirect materiais Indirect labor Power Repairs and maintenance 0.00 0 0 Total variable costs Find overhead costs Depreciation Building Machinery 0 0 0 0 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 AQ SQ SP Direct materials price variance Direct materials quantity variance Total direct materiais variance i ne company incurred the following actual costs when it operated at 75% or capacity in Uctober $ 370,200 258,300 Direct materials (61,000 lbs. $6.20 per lb.) Direct labor (21,000 hrs. $12.30 per hr.) Overhead costs Indirect materials Indirect labor Power Repairs and maintenance Depreciation-Building Depreciation Machinery Taxes and insurance Supervision Total costs $ 41,650 176,500 17,250 51.750 24,000 94.500 14,400 295,000 715,050 5. Prepare a detailed overhead variance report that shows the variances for individual items of overhead. 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 Foed costs Total overhead costs
