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How would one go about solving for flexible budgets and overhead variance? Antuan Company set the following standard costs for one unit of its product.

How would one go about solving for flexible budgets and overhead variance?

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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 (1.9 hrs. 6 $13.00 per hr.) 24.70 Overhead (1.9 hrs. 9 $18.50 per hr.) 35.15 Total standard cost $79.85 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 15,000 Repairs and maintenance 30,000 Total variable overhead costs $135,000 Fixed overhead costs DepreciationBuilding 24,000 DepreciationMachinery 70,000 Taxes and insurance 17,000 Supervision 281,250 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. The company incurred the following actual costs when it operated at 75% of capacity in October. Direct materials (61,500 Ibs. @ $5.10 per lb.) $ 313,650 Direct labor (21,000 hrs. 6 $13.20 per hr.) 277,200 Overhead costs Indirect materials $ 41,200 Indirect labor 176,350 Power 17,250 Repairs and maintenance 34,500 DepreciationBuilding 24,000 DepreciationMachinery 94,500 Taxes and insurance 15,300 Supervision 281,250 684,350 Total costs $1,275,200 Required 8 2 . Prepare flexible overhead budgets for October showing the amounts of each variable and fixed co 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 Budge Flexible Budget for Variable Amount Total Fixed 65%0 5/0 85% of per Unit Cost apacity apacity capacity Sales ( in units ) 13 000 15.000 17.000 Variable overhead costs Indirect materials 15 000 Indirect labor Power Repairs and maintenance Total variable costs 15000Indirect labor Repairs and maintenance otal variable costs Fixed overhead costs DepreciationBuilding DepreciationMachinery Taxes and insurance Supervision Total overhead costs 3. Compute the direct materials cost variance, including its price and quantity variances. A0 = Actual Quantity so = Standard Quantity AP = Actual Price SP = Standard Price 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 Actual Cos Standard Cos5. Prepare a detailed overhead variance report that shows the variances for individual items of overhead.

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