Antuan Company set the following standard costs for one unit of its product. Direct materials (4.0 Ibs. @ $5.00 per Ib.) Direct labor (1.8 hrs. @ $10.00 per hr.) Overhead (1.8 hrs. @ $18.50 per hr.) Total standard cost $20.00 18.00 33.30 $71.30 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 (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 Fixed ov ead Depreciation-Building 23,000 Depreciation-Machinery 70,000 Taxes and insurance 17,000 Supervision 254,500 Total fixed overhead costs $135,000 364,500 17,000 254,500 Taxes and insurance Supervision Total fixed overhead costs Total overhead costs 364,500 $499,500 The company incurred the following actual costs when it operated at 75% of capacity in October. $ 308,550 202,000 Direct materials (60,500 Ibs. @ $5.10 per lb.) Direct labor (20,000 hrs. @ $10.10 per hr.) Overhead costs Indirect materials Indirect labor Power Repairs and maintenance Depreciation-Building Depreciation-Machinery Taxes and insurance Supervision Total costs $ 41,750 176,300 17,250 34,500 23,000 94,500 15,300 254,500 657,100 $1,167,650 Required: 1&2. 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 per Unit Flexible Budget for 65% of 75% of 85% of capacity capacity capacity Cost Sales in units) Variable overhead costs $ 0.00 0 0 0 Fixed overhead costs 0 0 0 Total overhead costs 3. Compute the direct materials cost variance, including its price and quantity variances. (Indicate the effect of each variance by selecting for favorable, unfavorable, and No variance.) Actual Cost Standard Cost 0 $ 0 $ 0 $ 0 0 4. Compute the direct labor cost variance, including its rate and efficiency variances. (Indicate the effect of each variance by selecting for favorable, unfavorable, and No variance. Round "Rate per hour" answers to two decimal places.) Actual Cost Standard Cost $ 0 $ 0 $ 0 0 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
