Questions

Required information (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. @ $6.00 per Ib.) Direct labor (1.9 hrs. @ $14.000 per hr.) Overhead (1.9 hrs. @ $18.50 per 251 hr.) Total standard cost $85.75 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 30,000 maintenance Total variable $135,000 overhead costs Fixed overhead costs Depreciation, 24,000 Building Depreciation, 72,000 Machinery Taxes and insurance 18,000 Supervision 278, 250 Total fixed overhead 392,250 costs Total overhead costs $527,250 The company incurred the following actual costs when it operated at 75% of capacity in October. $ 375, 100 300,300 Direct materials (60,500 Ibs. @ $6.20 per lb.) Direct labor (21,000 hrs. @ $14.30 per hr.) Overhead costs Indirect materials Indirect labor Power Repairs and maintenance Depreciation-Building Depreciation-Machinery Taxes and insurance Supervision Total costs $ 41, 350 176,650 17,250 34,500 24,000 97,200 16,200 278, 250 685,400 $1,360,800 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 Ontohar 21 Flexible Budget Flexible Budget for Variable Total 65% of 75% of 85% of Amount per Fixed Unit capacity capacity Cost capacity Sales (in units) Variable overhead costs $ 0.00 00 Fixed overhead costs Total overhead costs 3. Compute the direct materials cost variance, including its price and quantity variances. AQ = Actual Quantity SQ = Standard Quantity AP = Actual Price SP = Standard Price Actual Cost Standard Cost $ 0 $ 0 | $ 0 0 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 Cost Standard Cost 5. Prepare a detailed overhead variance report that shows the variances for individual items of overhead. 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