Required information

Problem 8-3A Flexible budget preparation; computation of materials, labor, and overhead variances; and overhead variance report LO P1, P2, P3, C2

[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		71,000
Taxes and insurance		17,000
Supervision		252,500
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 (61,000 Ibs. @ $5.10 per lb.)				$	311,100
Direct labor (19,000 hrs. @ $13.30 per hr.)					252,700
Overhead costs
Indirect materials	$	41,300
Indirect labor		176,600
Power		17,250
Repairs and maintenance		34,500
DepreciationBuilding		24,000
DepreciationMachinery		95,850
Taxes and insurance		15,300
Supervision		252,500			657,300
Total costs				$	1,221,100

rev: 03_28_2018_QC_CS-122864

Problem 8-3A Part 1&2

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 Amount per Unit	Total Fixed Cost	65% of capacity	75% of capacity	85% of capacity
Sales (in units)
Variable overhead costs
Fixed overhead costs
Total overhead costs