Question
Problem 8-3A (Algo) Flexible overhead budget; materials, labor, and overhead variances; and overhead variance report LO P1, P2, P3, P4 Skip to question [The following
Problem 8-3A (Algo) Flexible overhead budget; materials, labor, and overhead variances; and overhead variance report LO P1, P2, P3, P4
Skip to question
[The following information applies to the questions displayed below.] 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 (1.7 hours @ $11.00 per hour) | 18.70 |
Overhead (1.7 hours @ $18.50 per hour) | 31.45 |
Standard cost per unit | $ 75.15 |
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 | 30,000 |
Total variable overhead costs | 135,000 |
Fixed overhead costs | |
DepreciationBuilding | 24,000 |
DepreciationMachinery | 70,000 |
Taxes and insurance | 18,000 |
Supervisory salaries | 224,750 |
Total fixed overhead costs | 336,750 |
Total overhead costs | $ 471,750 |
The company incurred the following actual costs when it operated at 75% of capacity in October.
Direct materials (76,000 pounds @ $5.20 per pound) | $ 395,200 | |
---|---|---|
Direct labor (20,000 hours @ $11.30 per hour) | 226,000 | |
Overhead costs | ||
Indirect materials | $ 41,800 | |
Indirect labor | 176,600 | |
Power | 17,250 | |
Maintenance | 34,500 | |
DepreciationBuilding | 24,000 | |
DepreciationMachinery | 94,500 | |
Taxes and insurance | 16,200 | |
Supervisory salaries | 224,750 | 629,600 |
Total costs | $ 1,250,800 |
Problem 8-3A (Algo) Part 1
Required: 1. Prepare flexible overhead budgets for October showing amounts of each variable and fixed cost at the 65%, 75%, and 85% capacity levels.
ANTUAN COMPANY Flexible Overhead Budgets
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started