Problem 21-3A 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 (5.0 Ibs. @ $4.00 per Ib.) Direct labor (1.9 hrs. @ $11.00 per hr.) Overhead (1.9 hrs. @ $18.50 per hr.) Total standard cost $20.00 20.99 35.15 $76.05 The predetermined overhead rate ($18.50 per direct labor hour) is based or' 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% capac level. Overhead Budget (75% Capacity) Variable overhead costs 'I 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 Depreciation-Building 24,800 Depreciation-Machinery 71,000 Taxes and insurance 18,000 Supervision 279, 250 Total fixed overhead costs 392.250 Total overhead costs $527,250 Prev 1 2 3 4 of 4 Next > 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 Fixed overhead costs Depreciation-Building 24,000 Depreciation Machinery 71,000 Taxes and insurance 18,000 Supervision 279, 250 Total fixed overhead costs Total overhead costs $135,000 392,250 $527,250 The company incurred the following actual costs when it operated at 75% of capacity in Octobe $ 319,200 244,200 Direct materials (76,000 Ibs. @ $4.20 per lb.) Direct labor (22,000 hrs. @ $11.10 per hr.) Overhead costs Indirect materials Indirect labor Power Repairs and maintenance Depreciation-Building Depreciation-Machinery Taxes and insurance Supervision Total costs $ 41,500 176,250 17,250 34,500 24,000 95,850 16,200 279, 250 684,800 $1,248, 200 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 es 0 $ 0 0 0.00 Fixed overhead costs 0 0 0 Total overhead costs Problem 21-3A 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.) Actual Cost Standard Cost s 0 5 0 $ 0 0 Problem 21-3A 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 Cout $ 0 o $ 0 0 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 Aset Tool Frame
