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Antuan Company set the following standard costs per unit for its product. Direct materials (5.0 pounds @ $5.00 per pound) $ 25.00 Direct labor (2.0
Antuan Company set the following standard costs per unit for its product.
Direct materials (5.0 pounds @ $5.00 per pound) | $ 25.00 |
---|---|
Direct labor (2.0 hours @ $11.00 per hour) | 22.00 |
Overhead (2.0 hours @ $18.50 per hour) | 37.00 |
Standard cost per unit | $ 84.00 |
The standard overhead rate ($18.50 per direct labor hour) is based on a predicted activity level 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 |
Maintenance | 45,000 |
Total variable overhead costs | 150,000 |
Fixed overhead costs | |
DepreciationBuilding | 24,000 |
DepreciationMachinery | 72,000 |
Taxes and insurance | 16,000 |
Supervisory salaries | 293,000 |
Total fixed overhead costs | 405,000 |
Total overhead costs | $ 555,000 |
The company incurred the following actual costs when it operated at 75% of capacity in October.
Direct materials (75,500 pounds @ $5.20 per pound) | $ 392,600 | |
---|---|---|
Direct labor (20,000 hours @ $11.20 per hour) | 224,000 | |
Overhead costs | ||
Indirect materials | $ 41,100 | |
Indirect labor | 176,650 | |
Power | 17,250 | |
Maintenance | 51,750 | |
DepreciationBuilding | 24,000 | |
DepreciationMachinery | 97,200 | |
Taxes and insurance | 14,400 | |
Supervisory salaries | 293,000 | 715,350 |
Total costs | $ 1,331,950 |
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