Antuan Company set the following standard costs for one unit of its product. $25.00 Direct materials (5.2 Ibs. @ $5.00 per Ib.) Direct labor (1.8 hrs. @ $13.00 per hr.) Overhead (1.8 hrs. @ $18.50 per hr.) 23.49 33.30 Total standard cost $81.79 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 75,00 Power 15,00 Repairs and maintenance 30, see Total variable overhead costs $135,000 Fixed overhead costs Depreciation-Building Depreciation-Machinery Taxes and insurance 24, see 70, eee 18, eee 252,500 Supervision Total fixed overhead costs 364,589 $499, 580 Total overhead costs The company incurred the following actual costs when it operated at 75% of capacity in October $ 387,600 290,400 Direct materials (76,608 Ibs. @ $5.10 per 1b.) Direct labor (22,eee hrs. @ $13.20 per hr.) Overhead costs Indirect materials Indirect labor Power Repairs and maintenance Depreciation-Building Depreciation-Machinery Taxes and insurance $ 41,380 176,980 17,250 34,500 24,00 94,580 16,280 252,500 Supervision 657,150 Total costs $1,335,150 Required: 182. 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 Flexible Budget for Variable Amount Total Fixed Cost 65% of capacity 75% of capacity per Unit 85% of capacity Sales (in units) Variable overhead costs Indirect materials Indirect labor Power Repairs and maintenance Total variable costs S 0.00 0 0 0 Fixed overhead costs Depreciation-Building Depreciation-Machinery Taxes and insurance Supervision Total fixed costs 0 0 0 Total overhead costs 3. Compute the direct materials cost varlance, including its price and quantity varlances. (Indicate the effect of each varlance by selecting for favorable, unfavorable, and No varlance.) Actual Cost Standard Cost Actual price x Actual quantity Standard price Standard quantity Standard price X Actual quantity 76,000 5.10 78,000 $387,600 $ 0 $ 0 S OO 4. Compute the direct labor cost varlance, including its rate and efficiency variances. (Indicate the effect of each varlance by selecting for favorable, unfavorable, and No varlance. Round "Rate per hour" answers to two decimal places.) Actual Cost Standard Cost Actual hours Actual rate x Actual hours x Standard rate Standard hours Standard rate $ O S 0 $ Oo 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 Indirect materials Indirect labor Power Repairs and maintenance Total variable costs Fixed costs Repairs and maintenance Depreciation-Building Depreciation-Machinery Taxes and insurance Supervision Total fixed costs Total overhead costs
