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 (2.0 hrs. @ $12.00 per hr.)		24.00
Overhead (2.0 hrs. @ $18.50 per hr.)		37.00
Total standard cost	$	77.00

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.

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 (2.0 hrs. @ $12.00 per hr.)		24.00
Overhead (2.0 hrs. @ $18.50 per hr.)		37.00
Total standard cost	$	77.00

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.

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		25,000
DepreciationMachinery		70,000
Taxes and insurance		17,000
Supervision		308,000
Total fixed overhead costs					420,000
Total overhead costs				$	555,000

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

Direct materials (61,500 Ibs. @ $4.10 per lb.)				$	252,150
Direct labor (22,000 hrs. @ $12.10 per hr.)					266,200
Overhead costs
Indirect materials	$	41,950
Indirect labor		176,700
Power		17,250
Repairs and maintenance		34,500
DepreciationBuilding		25,000
DepreciationMachinery		94,500
Taxes and insurance		15,300
Supervision		308,000			713,200
Total costs				$	1,231,550

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

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.rev: 03_28_2018_QC_CS-122864

ANTUAN COMPANY
Flexible Overhead Budgets
For Month Ended October 31
	Flexible Budget		Flexible Budget for
	Variable Amount per Unit	Total Fixed Cost	65% of capacity	75% of capacity	85% of capacity
Sales (in units)			13,000	15,000	17,000
Variable overhead costs
Indirect materials	$1.00		13,000	15,000	17,000
Indirect labor	5.00		65,000	75,000	85,000
Power	1.00		13,000	15,000	17,000
	2.00		26,000	30,000	34,000
Total variable costs	$9.00		117,000	135,000	153,000
Fixed overhead costs
DepreciationBuilding		$25,000	25,000	25,000	25,000
DepreciationMachinery		70,000	70,000	70,000	70,000
Taxes and insurance		17,000	17,000	17,000	17,000
Supervision		308,000	308,000	308,000	308,000
		420,000	420,000	420,000	420,000
Total overhead costs			$37,000	$555,000	$573,000

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			0				0	Standard Cost
AQ	x							SQ	x
	x	0							x
			$0	0			$0
				$0
				0