Res variance report LO P1, P2, P3, P4 [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 @ 55 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 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 $ 45,000 Indirect labor 180,000 Power 45,000 Maintenance 90,000 Total variable overhead costs 360,000 Fixed overhead costs Depreciation-Building 24,000 Depreciation-achinery 80,000 Taxes and insurance 12,000 The standard overhead rate ($18.50 per direct labor hour) is based on a predicted activity level 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 $ 45,000 180,00 45,000 90,000 360,000 Overhead Budget 25% Capacity) Variable overhead costs Indirect materials Indirect labor Power Maintenance Total variable overhead costs Fixed overhead costs Depreciation-building Depreciation-achinery Taxes and insurance Supervisory salaries Total fixed overhead costs Total overhead costs 24,000 30,000 12,000 79.000 195.000 $ 555,00 The company incurred the following actual costs when it operated at 75% of capacity in October 5.464,100 526.125 Direct materials (81.000 pounds 55.19 per pound Direct lobor (30,500 hours $17.25 per hour Overhead costs Supervisory salaries 79, eee 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 (91,600 pounds @ $5.10 per pound) $ 464,100 Direct labor (30,590 hours 9 $17.25 per hour) 526,125 Overhead costs Indirect materials $ 44,250 Indirect labor 177,750 Power 43,000 Maintenance 96,000 Depreciation-Building 24,000 Depreciation Machinery 75,000 Taxes and insurance 11,500 Supervisory salaries 89,000 560, 500 Total costs $1,550,725 Problem 8-3A (Static) Part 2 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.) Answer is complete but not entirely correct. Standard Cor Actual Cost Actual quantity 30.500 $ 526.125 Actual price 1725 Actual quantity 30 500 X Actual price 17003 Standard quantity 30.000 $ $ 518.500 $10.000 $7625 $ 8.500 83 Dimet laborate variance Direct labor oficiency variance Direct materials arance 7625 8500 16.125 Unfavorable Favorable Favorable S o nces. (Indicate the effect of each variance by selecting Answer is complete but not entirely correct. Standard Cost X Actual price X Standard quantity 30,000 Standard price 17.00 >IX $ X X 17.00 X $ $ 518,500 $ 510.000 $ 8,500 Unfavorable Favorable Favorable x
