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Antuan Company set the following standard costs for one unit of its product. Direct materials (3.0 Ibs. @ $5.00 per Ib.) $ 15.00 Direct labor
Antuan Company set the following standard costs for one unit of its product. |
Direct materials (3.0 Ibs. @ $5.00 per Ib.) | $ | 15.00 |
Direct labor (1.6 hrs. @ $13.00 per hr.) | 20.80 | |
Overhead (1.6 hrs. @ $18.50 per hr.) | 29.60 | |
Total standard cost | $ | 65.40 |
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 | 90,000 | ||||
Power | 15,000 | ||||
Repairs and maintenance | 30,000 | ||||
Total variable overhead costs | $ | 150,000 | |||
Fixed overhead costs | |||||
Depreciationbuilding | 23,000 | ||||
Depreciationmachinery | 71,000 | ||||
Taxes and insurance | 17,000 | ||||
Supervision | 183,000 | ||||
Total fixed overhead costs | 294,000 | ||||
Total overhead costs | $ | 444,000 | |||
The company incurred the following actual costs when it operated at 75% of capacity in October. |
Direct materials (46,500 Ibs. @ $5.20 per lb.) | $ | 241,800 | |||
Direct labor (28,000 hrs. @ $13.20 per hr.) | 369,600 | ||||
Overhead costs | |||||
Indirect materials | $ | 41,600 | |||
Indirect labor | 176,100 | ||||
Power | 17,250 | ||||
Repairs and maintenance | 34,500 | ||||
Depreciationbuilding | 23,000 | ||||
Depreciationmachinery | 95,850 | ||||
Taxes and insurance | 15,300 | ||||
Supervision | 183,000 | 586,600 | |||
Total costs | $ | 1,198,000 | |||
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