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Problem 08-3A Flexible budget preparation; computation of materials, labor, and overhead variances; and overhead variance report LO P1, P2, P3, P4 Skip to question [The

Problem 08-3A Flexible budget preparation; computation of materials, labor, and overhead variances; and overhead variance report LO P1, P2, P3, P4

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[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.) $ 20.00
Direct labor (1.8 hrs. @ $13.00 per hr.) 23.40
Overhead (1.8 hrs. @ $18.50 per hr.) 33.30
Total standard cost $ 76.70

The predetermined overhead rate ($18.50 per direct labor hour) is based on an expected volume 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

Repairs and maintenance 30,000
Total variable overhead costs $ 135,000
Fixed overhead costs
DepreciationBuilding 24,000
DepreciationMachinery 72,000
Taxes and insurance 17,000
Supervision 251,500
Total fixed overhead costs 364,500
Total overhead costs $ 499,500

The company incurred the following actual costs when it operated at 75% of capacity in October.

Direct materials (60,500 Ibs. @ $5.10 per lb.) $ 308,550
Direct labor (23,000 hrs. @ $13.20 per hr.) 303,600
Overhead costs
Indirect materials $ 41,000
Indirect labor 176,000
Power 17,250
Repairs and maintenance 34,500
DepreciationBuilding 24,000
DepreciationMachinery 97,200
Taxes and insurance 15,300
Supervision 251,500 656,750
Total costs $ 1,268,900

rev: 04_27_2020_QC_CS-209738

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.)

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