Antuan Company set the following standard costs for one unit of its product. Direct materials (4. Ibs. @ $4.ee per Ib.) Direct labor (1.9 hrs. @ $13.00 per hr.) Overhead (1.9 hrs. @ $18.50 per hr.) Total standard cost $16.00 24.70 35.15 $75.85 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, eee Repairs and maintenance 30, eee Total variable overhead costs $135,000 Fixed overhead costs Depreciation-Building 25,000 Depreciation-Machinery 71,000 Taxes and insurance 17,eee Supervision 279, 250 Total fixed overhead costs 392,250 Total overhead costs $527,250 The company incurred the following actual costs when it operated at 75% of capacity in October Direct materials (61,000 lbs. @ 54.20 per lb.) Direct labor (19,000 hrs. @ $13.20 per hr.) Overhead costs $ 256,200 250,800 $ 256,200 250,800 Direct materials (61, eee Ibs. @ $4.20 per lb.) Direct labor (19,000 hrs. @ $13.2e per hr.) Overhead costs Indirect materials Indirect labor Power Repairs and maintenance Depreciation-Building Depreciation Machinery Taxes and insurance Supervision Total costs $ 41,100 176,950 17,250 34,500 25,000 95,850 15,380 279,250 685,200 $1,192,200 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 65% of per Unit Cost capacity Flexible Budget for 75% of 85% of capacity capacity Sales (in units) Variable overhead costs ANTUAN COMPANY Flexible Overhead Budgets For Month Ended October 31 Flexible Budget Flexible Budget for Variable Amount Total Fixed 65% of 75% of 85% of Cost capacity capacity capacity per Unit Sales (in units) Variable overhead costs Fixed overhead costs Total overhead costs 3. Compute the direct materials cost variance, including its price and quantity variances. (Indicate the effect of each variance by electing for favorable, unfavorable, and No variance.) Actual Cost Standard Cost 1. 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 5. Prepare a detailed overhead variance report that shows the variances for individual items of overhead. (Indicate the effect of each variance by selecting for favorable, unfavorable, and No variance.) ANTUAN COMPANY 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
