Question
Top of Form [The following information applies to the questions displayed below.] Antuan Company set the following standard costs for one unit of its product.
Top of Form
[The following information applies to the questions displayed below.]
Antuan Company set the following standard costs for one unit of its product. |
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Direct materials (4.0 Ibs. @ $5.00 per Ib.) | $ | 20.00 |
Direct labor (1.6 hrs. @ $13.00 per hr.) | 20.80 | |
Overhead (1.6 hrs. @ $18.50 per hr.) | 29.60 | |
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Total standard cost | $ | 70.40 |
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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 | ||||
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Total variable overhead costs | $ | 135,000 | |||
Fixed overhead costs | |||||
Depreciationbuilding | 23,000 | ||||
Depreciationmachinery | 72,000 | ||||
Taxes and insurance | 18,000 | ||||
Supervision | 196,000 | ||||
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Total fixed overhead costs | 309,000 | ||||
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Total overhead costs | $ | 444,000 | |||
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The company incurred the following actual costs when it operated at 75% of capacity in October. |
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Direct materials (61,000 Ibs. @ $5.10 per lb.) | $ | 311,100 | |||
Direct labor (28,000 hrs. @ $13.40 per hr.) | 375,200 | ||||
Overhead costs | |||||
Indirect materials | $ | 41,950 | |||
Indirect labor | 176,850 | ||||
Power | 17,250 | ||||
Repairs and maintenance | 34,500 | ||||
Depreciationbuilding | 23,000 | ||||
Depreciationmachinery | 97,200 | ||||
Taxes and insurance | 16,200 | ||||
Supervision | 196,000 | 602,950 | |||
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Total costs | $ | 1,289,250 | |||
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9.
Required information
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. |
3. | Compute the direct materials cost variance, including its price and quantity variances. |
Required information
4. | Compute the direct labor cost variance, including its rate and efficiency variances. |
12.
Required information
5. | Prepare a detailed overhead variance report that shows the variances for individual items of overhead. |
If you could let me know if I have made any mistakes I would really appreciate it very much.
Thanks
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