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Antuan Company set the following standard costs for one unit of its product. Direct materials (4.0 Ibs. @ $5.00 per Ib.) $ 20.00 Direct labor
Antuan Company set the following standard costs for one unit of its product.
Direct materials (4.0 Ibs. @ $5.00 per Ib.) | $ | 20.00 |
Direct labor (1.8 hrs. @ $14.00 per hr.) | 25.20 | |
Overhead (1.8 hrs. @ $18.50 per hr.) | 33.30 | |
Total standard cost | $ | 78.50 |
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 | 24,000 | ||||
DepreciationMachinery | 72,000 | ||||
Taxes and insurance | 18,000 | ||||
Supervision | 250,500 | ||||
Total fixed overhead costs | 364,500 | ||||
Total overhead costs | $ | 499,500 | |||
he company incurred the following actual costs when it operated at 75% of capacity in October.
Direct materials (60,500 Ibs. @ $5.10 per lb.) | $ | 308,550 | |||
Direct labor (22,000 hrs. @ $14.10 per hr.) | 310,200 | ||||
Overhead costs | |||||
Indirect materials | $ | 41,600 | |||
Indirect labor | 176,200 | ||||
Power | 17,250 | ||||
Repairs and maintenance | 34,500 | ||||
DepreciationBuilding | 24,000 | ||||
DepreciationMachinery | 97,200 | ||||
Taxes and insurance | 16,200 | ||||
Supervision | 250,500 | 657,450 | |||
Total costs | $ | 1,276,200 | |||
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