Antuan Company set the following standard costs for one unit of its product. Direct materials (3.0 Ibs. @ $6.00 per Ib.) Direct labor (1.6 hrs. @ $12.00 per hr.) Overhead (1.6 hrs. @ $18.50 per hr.) Total standard cost $18.00 19.20 29.60 $66.80 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. $135,000 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 Pixed overhead costs Depreciation-Building 25,000 Depreciation-Machinery 71,000 Taxes and insurance 18,000 Supervision 195,000 Total fixed overhead costs Total overhead costs 309,000 $444,000 The company incurred the following actual costs when it operated at 75% of capacity in October. Direct materials (46,000 lbs. $6.10 per 1b.) Direct labor (21,000 hrs. $12.10 per hr.) $ 280, 600 254,100 The company incurred the following actual costs when it operated at 75% of capacity in October. $ 280,600 254,100 Direct materials (46,000 lbs. @ $6.10 per 1b.) Direct labor (21,000 hrs. @ $12.10 per hr.) Overhead costs Indirect materials Indirect labor Power Repairs and maintenance Depreciation-Building Depreciation-Machinery Taxes and insurance Supervision Total costs $ 41,450 176,650 17,250 34,500 25,000 95,850 16,200 195,000 601,900 $1,136,600 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 COMPA+Y Flexible Overhead Budgets For Month Ended October 31 Flexible Budget Variable Amount Total Fixed 65% of per Unit Cost capacity Flexible Budget for 75% of capacity 85% of capacity Sales (in units) Variable overhead costs 1 3 Prev 4 of 10 Next > N Required information 1 ANTUAN COMPANY Flexible Overhead Budgets For Month Ended October 31 Flexible Budget Variable Amount Total Fixed 65% of Cost capacity Part 1 of 4 Flexible Budget for 75% of capacity 85% of capacity per Unit 02:53:50 Sales (in units) Variable overhead costs 0 0 $ 0.00 Fixed overhead costs 0 0 0 0 Total overhead costs wop Taxes and insurance Supervision Total costs 16,200 195,000 601,900 $1,136,600 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 Standard Cost Actual Cost 0 $ 0 $ 0 $ 0 0 195,000 Supervision Total costs 601,900 $1,136,600 3 Part 3 of 4 4. Compute the direct labor cost variance, including its rate and efficiency variances. AH - Actual Hours SH = Standard Hours AR - Actual Rate SR = Standard Rate 8 02:52:59 Actual Cost Standard Cost 4. 5. Prepare a detailed overhead variance report that shows the variances for individual items of overhead. ANTUAN COMPANY Overhead Variance Report For Month Ended October 31 Part 4 of 4 Expected production volume Production level achieved Volume variance 8 02:52:30 Flexible Budget Actual Results Variances Fav. / Unfav. Variable costs Fixed costs Total overhead costs
