Required information [The following information applies to the questions displayed below.] Antuan Company set the following standard costs for one unit of its product. Direct materials (4.0 Ibs. @ $5.00 per Ib.)$20.00Direct labor (1.7 hrs. @ $11.00 per hr.) 18.70Overhead (1.7 hrs. @ $18.50 per hr.) 31.45Total standard cost$70.15 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$15,000 Indirect labor 75,000 Power 15,000 Repairs and maintenance 30,000 Total variable overhead costs $135,000Fixed overhead costs Depreciation—Building 24,000 Depreciation—Machinery 72,000 Taxes and insurance 17,000 Supervision 223,750 Total fixed overhead costs 336,750Total overhead costs $471,750 The company incurred the following actual costs when it operated at 75% of capacity in October. Direct materials (60,500 Ibs. @ $5.10 per lb.) $308,550Direct labor (22,000 hrs. @ $11.30 per hr.) 248,600Overhead costs Indirect materials$41,600 Indirect labor 176,600 Power 17,250 Repairs and maintenance 34,500 Depreciation—Building 24,000 Depreciation—Machinery 97,200 Taxes and insurance 15,300 Supervision 223,750 630,200Total costs $1,187,350 3. Compute the direct materials cost variance, including its price and quantity variances. (Indicate the effect of each variance byselecting for favorable, unfavorable, and No variance.)Standard CostActual Cost0$0$0 3. Compute the direct materials cost variance, including its price and quantity variances. (Indicate the effect of each variance byselecting for favorable, unfavorable, and No variance.)Standard CostActual Cost0$0$0

Direct material cost variance is the sum of Material price variance and material usage variances and…

Answered: 3. Compute the direct materials cost…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Required information

[The following information applies to the questions displayed below.]

Antuan Company set the following standard costs for one unit of its product.


Direct materials (4.0 Ibs. @ $5.00 per Ib.)	$	20.00
Direct labor (1.7 hrs. @ $11.00 per hr.)		18.70
Overhead (1.7 hrs. @ $18.50 per hr.)		31.45
Total standard cost	$	70.15

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	$	15,000
Indirect labor		75,000
Power		15,000
Repairs and maintenance		30,000
Total variable overhead costs			$	135,000
Fixed overhead costs
Depreciation—Building		24,000
Depreciation—Machinery		72,000
Taxes and insurance		17,000
Supervision		223,750
Total fixed overhead costs				336,750
Total overhead costs			$	471,750

The company incurred the following actual costs when it operated at 75% of capacity in October.


Direct materials (60,500 Ibs. @ $5.10 per lb.)			$	308,550
Direct labor (22,000 hrs. @ $11.30 per hr.)				248,600
Overhead costs
Indirect materials	$	41,600
Indirect labor		176,600
Power		17,250
Repairs and maintenance		34,500
Depreciation—Building		24,000
Depreciation—Machinery		97,200
Taxes and insurance		15,300
Supervision		223,750		630,200
Total costs			$	1,187,350

3. Compute the direct materials cost variance, including its price and quantity variances. (Indicate the effect of each variance by
selecting for favorable, unfavorable, and No variance.)
Standard Cost
Actual Cost
0
$
0
$
0

Expert Solution

Trending now

This is a popular solution!

Step by step

Solved in 3 steps with 2 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions