Problem 08-3A Flexible budget preparation; computation of materials, labor, and overhead variances; and overhead variance report LO P1, P2, P3, P4 The following information applies to the questions displayed below. Antuan Company set the following standard costs for one unit of its product Direct materials (4.0 Ibs. $5.00 per Ib.) Direct labor (1.9 hrs. $12.00 per hr.) Overhead (1.9 hrs. $18.50 per hr.) Total standard cont $20.00 22.80 35.15 $77.95 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 (750 Capacity) Variable overhead costs Indirect materials $ 15,000 Indirect labor 75,000 Power 15,000 Repairs and maintenance 30,000 Total variable overhead costs Fixed overhead costs Depreciation-Building 24,000 Depreciation Machinery 71,000 Taxes and insurance 16,000 Supervision 281,250 Total fixed overhead costs Total overhead costa 392,250 $527,250 The company incurred the following actual costs when it operated at 75% of capacity in October Direct materials (61,000 Iba. $5.20 per lb.) Direct labor (22,000 hrs. @ $12.30 per hr.) $ 317,200 270,600 The company incurred the following actual costs when it operated at 75% of capacity in October 317,200 270,600 Direct materials (61,000 lbs. @ $5.20 per lb.) Direct labor (22,000 hrs. @ $12.30 per hr.) Overhead costs Indirect materials Indirect labor Power Repairs and maintenance Depreciation-Building Depreciation Machinery Taxes and insurance Supervision Total costs 41,600 176,350 17,250 34,500 24,000 95,850 14,400 281,250 685,200 $1,273,000 Problem 08-3A Part 1&2 4 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 Flexible Budget for Variable Total Fixed 65% of 75% of 85% of Amount per Unit Cost capacity capacity capacity Sales (in units) Variable overhead costs $ 0.00 0 0 0 Fixed overhead costs 0 0 0 0 Total overhead costs Required information Problem 08-3A Flexible budget preparation; computation of materials, labor, and overhead variances; and overhead variance report LO P1, P2, P3, P4 The following information applies to the questions displayed below) Antuan Company set the following standard costs for one unit of its product. Direct materials (4.0 Ibs. @ $5.00 per tb.) Direct labor (1.9 hrs. $12.00 per hr.) Overhead (1.9 hrs. & $18.50 per hr.) Total standard cost $20.00 22.80 35.15 577.95 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 (751 Capacity) Variable overhead coats Indirect materiale $ 15,000 Indirect labor 75,000 Power 15,000 Repairs and maintenance 30,000 Total variable overhead costa $135,000 Fixed overhead coats Depreciation Building 24,000 Depreciation Machinery 71,000 Taxes and insurance 16,000 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. $ 317,200 270,600 Direct materials (61,000 Ibs. @ $5.20 per lb.) Direct labor (22,000 hrs. @ $12.30 per hr.) Overhead costs Indirect materials Indirect labor Power Repairs and maintenance Depreciation-Building Depreciation-Machinery Taxes and insurance Supervision Total costs $ 41,600 176,350 17,250 34,500 24,000 95,850 14,400 281,250 685,200 $1,273,000 Problem 08-3A Part 3 3. Compute the direct materials cost variance, including its price and quantity variances. (Indicate the effect of each variance by selecting for favorable, unfavorable, and No variance.) Standard Com Actual Cost 5 0 5 0 5 Problem 08-3A Part 4 4. 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 Con 5 0 0 $ Problem 08-3A Part 5 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