Silver Company set the following standard costs for one unit of its product. Direct materials (3.0 Ibs. @ $5.0 per Ib.) $15.00 Direct labor (1.6 hrs. @ $13.0 per hr.) 20.80 Overhead (1.6 hrs. @ $18.50 per hr.) 29.60 Total standard cost $65.40 ________________________________________ The predetermined overhead rate ($18.50 per direct labor hour) is based on 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% level. Overhead Budget (75% capacity) Variable overhead costs Indirect materials $22,000 Indirect labor 90,000 Power 22,000 Repairs and maintenance 45,000 Total variable overhead costs $179,000 Fixed overhead costs Depreciationbuilding 24,000 Depreciationmachinery 74,000 Taxes and insurance 19,000 Supervision 148,000 Total fixed overhead costs 265,000 Total overhead costs $444,000 ________________________________________ The company incurred the following actual costs when it operated at 75% of capacity in October. Direct materials (45,500 Ibs. @ $5.10 per lb.) $232,050 Direct labor (31,000 hrs. @ $13.40 per hr.) 415,400 Overhead costs Indirect materials $45,750 Indirect labor 177,250 Power 25,300 Repairs and maintenance 51,750 Depreciationbuilding 24,000 Depreciationmachinery 99,900 Taxes and insurance 17,100 Supervision 148,000 589,050 Total costs $1,236,500 ________________________________________ 15. Examine the monthly overhead budget to (a) determine the costs per unit for each variable overhead and its total per unit costs, and (b) identify the total fixed costs per month. (Round your per unit answers to 2 decimal places. Omit the "$" sign in your response.) Variable or Fixed Classification Per unit Amount Variable costs (per unit) Indirect materials $ Indirect labor Power Repairs and maintenance Total variable costs $ Fixed costs (per month) DepreciationBuilding $ DepreciationMachinery Taxes and insurance Supervision Total fixed costs $ ________________________________________ 16. Prepare flexible overhead budgets for October showing the amounts of each variable and fixed cost at the 65%, 75%, and 85% capacity levels. (Round your variable amount per unit answers to 2 decimal places. Round all other answers to the nearest whole dollar amount. Omit the "$" sign in your response.) SILVER COMPANY Flexible Overhead Budgets For Month Ended October 31 Flexible Budget Variable Amount per Unit Total Fixed Cost Flexible Budget for Unit Sales of 13,000 Flexible Budget for Unit Sales of 15,000 Flexible Budget for Unit Sales of 17,000 Variable overhead costs Indirect materials $ $ $ $ Indirect labor Power Repairs and maintenance Total variable costs $ Fixed overhead costs DepreciationBuilding $ DepreciationMachinery Taxes and insurance Supervision Total fixed costs $ Total overhead costs $ $ $ ________________________________________ 17. Compute the direct materials cost variance, including its price and quantity variances. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values. Leave no cells blank - be certain to enter "0" wherever required. Omit the "$" sign in your response.) Price variance $ Quantity variance $ Direct materials cost variance $ 18. Compute the direct labor cost variance, including its rate and efficiency variances. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values. Leave no cells blank - be certain to enter "0" wherever required. Omit the "$" sign in your response.) Rate variance $ Efficiency variance $ Direct labor cost variance $ 19. Compute the (a) variable overhead spending and efficiency variances, (b) fixed overhead spending and volume variances, and (c) total overhead controllable variance. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values. Leave no cells blank - be certain to enter "0" wherever required. Round your final answers to the nearest dollar amount. Omit the "$" sign in your response.) (a) Variable overhead spending variance $ Variable efficiency variance $ (b) Fixed overhead spending variance $ Fixed volume variance $ (c) Total overhead controllable variance $ 20. Prepare a detailed overhead variance report that shows the variances for individual items of overhead. (Leave no cells blank - be certain to enter "0" wherever required. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values. Omit the "$" & "%" signs in your response.) SILVER COMPANY Overhead Variance Report For Month Ended October 31 Volume Variance Expected production level % of capacity Production level achieved % of capacity Volume variance Controllable Variance Flexible Budget Actual Results Variances Variable overhead costs Indirect materials $ $ $ Indirect labor Power Repairs and maintenance Total variable costs Fixed overhead costs DepreciationBuilding DepreciationMachinery Taxes and insurance Supervision Total fixed costs Total overhead costs $ $ $ ________________________________________