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Required information Problem 21-3A 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 (6 lbs. @ $5 per Ib.) Direct labor (2 hrs. @ $17 per hr.) Overhead (2 hrs. @ $18.50 per hr.) Total standard cost $ 30 34 37 $ 101 The predetermined overhead rate ($18.50 per direct labor hour) is based on an expected volume 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 Repairs and maintenance 90,000 Total variable overhead costs Fixed overhead costs Depreciation-Building 24,000 Depreciation-Machinery 80,000 Taxes and insurance 12,000 Supervision 79,000 Total fixed overhead costs Total overhead costs $360,000 195,000 $555,000 The company incurred the following actual costs when it operated at 75% of capacity in October. $ 464,100 526,125 Direct materials (91,000 lbs. @ $5.10 per lb.) Direct labor (30,500 hrs. @ $17.25 per hr.) Overhead costs Indirect materials Indirect labor Power Repairs and maintenance Depreciation-Building Depreciation Machinery Taxes and insurance Supervision Total costs $ 44,250 177,750 43,000 96,000 24,000 75,000 11,500 89,000 560,500 $1,550,725 Problem 21-3A 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. Problem 21-3A 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 Total Fixed 65% of 75% of Cost capacity capacity 13,000 15,000 per Unit 85% of capacity 17,000 Sales (in units) Variable overhead costs Indirect materials 3.00 39,000 45,000 51.000 Indirect labor 12.00 180.000 204,000 51,000 Power 156,000 39,000 78,000 3.00 45,000 90,000 Repairs and maintenance 6.00 102,000 Total variable costs $ 24.00 312,000 360,000 408,000 24,000 24,000 Fixed overhead costs Depreciation-Building DepreciationMachinery Taxes and insurance Supervision 24,000 75,000 24,000 75,000 75,000 75,000 11.500 11,500 11,500 11,500 89,000 89,000 89,000 89,000 Total fixed costs $ 199,500 $ 199,500 $ 199,500 $ 199,500 Total overhead costs Problem 21-3A Part 3 3. Compute the direct materials cost variance, including its price and quantity variances. AQ = Actual Quantity SQ = Standard Quantity AP = Actual Price SP = Standard Price Actual Cost Standard Cost 0 $ 0 GA $ 0 $ 0 0 Problem 21-3A Part 4 4. Compute the direct labor cost variance, including its rate and efficiency variances. AH = Actual Hours SH = Standard Hours AR = Actual Rate SR = Standard Rate Actual Cost Standard Cost $ 0 $ 0 $ Oo Problem 21-3A Part 5 5. Prepare a detailed overhead variance report that shows the variances for individual items of overhead. Expected production volume Production level achieved Volume variance ANTUAN COMPANY Overhead Variance Report For Month Ended October 31 75% of capacity 75% of capacity No variance Flexible Budget Actual Results Variances Fav. / Unfav. Variable costs Fixed costs Total overhead costs