Question
Required information Skip to question [The following information applies to the questions displayed below.] Antuan Company set the following standard costs per unit for its
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[The following information applies to the questions displayed below.] Antuan Company set the following standard costs per unit for its product.
Direct materials (6 pounds @ $5 per pound) | $ 30 |
---|---|
Direct labor (2 hours @ $17 per hour) | 34 |
Overhead (2 hours @ $18.50 per hour) | 37 |
Standard cost per unit | $ 101 |
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 | $ 45,000 |
Indirect labor | 180,000 |
Power | 45,000 |
Maintenance | 90,000 |
Total variable overhead costs | 360,000 |
Fixed overhead costs | |
DepreciationBuilding | 24,000 |
DepreciationMachinery | 80,000 |
Taxes and insurance | 12,000 |
Supervisory salaries | 79,000 |
Total fixed overhead costs | 195,000 |
Total overhead costs | $ 555,000 |
The company incurred the following actual costs when it operated at 75% of capacity in October.
Direct materials (91,000 pounds @ $5.10 per pound) | $ 464,100 | |
---|---|---|
Direct labor (30,500 hours @ $17.25 per hour) | 526,125 | |
Overhead costs | ||
Indirect materials | $ 44,250 | |
Indirect labor | 177,750 | |
Power | 43,000 | |
Maintenance | 96,000 | |
DepreciationBuilding | 24,000 | |
DepreciationMachinery | 75,000 | |
Taxes and insurance | 11,500 | |
Supervisory salaries | 89,000 | 560,500 |
Total costs | $ 1,550,725 |
2. Compute the direct materials variance, including its price and quantity variances. (Indicate the effect of each variance by selecting favorable, unfavorable, or no variance.)
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