Answered step by step
Verified Expert Solution
Question
1 Approved Answer
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. @ $12.00 per hr.) | 21.60 | |
Overhead (1.8 hrs. @ $18.50 per hr.) | 33.30 | |
Total standard cost | $ | 70.90 |
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 | $ | 30,000 | |||
Indirect labor | 75,000 | ||||
Power | 30,000 | ||||
Repairs and maintenance | 30,000 | ||||
Total variable overhead costs | $ | 165,000 | |||
Fixed overhead costs | |||||
Depreciationbuilding | 23,000 | ||||
Depreciationmachinery | 72,000 | ||||
Taxes and insurance | 17,000 | ||||
Supervision | 222,500 | ||||
Total fixed overhead costs | 334,500 | ||||
Total overhead costs | $ | 499,500 | |||
The company incurred the following actual costs when it operated at 75% of capacity in October. |
Direct materials (61,500 Ibs. @ $4.10 per lb.) | $ | 252,150 | ||||
Direct labor (28,000 hrs. @ $12.20 per hr.) | 341,600 | |||||
Overhead costs | ||||||
Indirect materials | $ | 41,600 | ||||
Indirect labor | 176,000 | |||||
Power | 34,500 | |||||
Repairs and maintenance | 34,500 | |||||
Depreciationbuilding | 23,000 | |||||
Depreciationmachinery | 97,200 | |||||
Taxes and insurance | 15,300 | |||||
Supervision | 222,500 | 644,600 | ||||
Total costs | $ | 1,238,350 | ||||
|
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started