Antuan Company set the following standard costs per unit for its product. $ 12.00 Direct materials (3.0 pounds @ $4.00 per pound) Direct labor (1.8 hours @ $12.00 per hour) Overhead (1.8 hours @ $18.50 per hour) 21.60 33.30 Standard cost per unit $ 66.90 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. $ 15,000 Indirect labor 75,000 Power 15,000 Maintenance 30,000 135,000 Total variable overhead costs Fixed overhead costs 24,000 Depreciation-Building Depreciation-Machinery Taxes and insurance 70,000 16,000 Supervisory salaries. 254,500 Total fixed overhead costs 364,500 Total overhead costs $ 499,500 The company incurred the following actual costs when it operated at 75% of capacity in October. Direct materials (46,000 pounds @ $4.20 per pound) Direct labor (19,000 hours @ $12.10 per hour) $ 193,200 229,900 Overhead costs. $ 41,700 Indirect materials. Indirect labor 176,600 Power 17,250 Maintenance 34,500 Depreciation-Building 24,000 94,500 Depreciation-Machinery Taxes and insurance Supervisory salaries. 14,400 254,500 657,450 Total costs $ 1,080,550
Antuan Company set the following standard costs per unit for its product. $ 12.00 Direct materials (3.0 pounds @ $4.00 per pound) Direct labor (1.8 hours @ $12.00 per hour) Overhead (1.8 hours @ $18.50 per hour) 21.60 33.30 Standard cost per unit $ 66.90 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. $ 15,000 Indirect labor 75,000 Power 15,000 Maintenance 30,000 135,000 Total variable overhead costs Fixed overhead costs 24,000 Depreciation-Building Depreciation-Machinery Taxes and insurance 70,000 16,000 Supervisory salaries. 254,500 Total fixed overhead costs 364,500 Total overhead costs $ 499,500 The company incurred the following actual costs when it operated at 75% of capacity in October. Direct materials (46,000 pounds @ $4.20 per pound) Direct labor (19,000 hours @ $12.10 per hour) $ 193,200 229,900 Overhead costs. $ 41,700 Indirect materials. Indirect labor 176,600 Power 17,250 Maintenance 34,500 Depreciation-Building 24,000 94,500 Depreciation-Machinery Taxes and insurance Supervisory salaries. 14,400 254,500 657,450 Total costs $ 1,080,550
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Antuan Company set the following standard costs per unit for its product.
$ 12.00
Direct materials (3.0 pounds @ $4.00 per pound)
Direct labor (1.8 hours @ $12.00 per hour)
Overhead (1.8 hours @ $18.50 per hour).
21.60
33.30
Standard cost per unit
$ 66.90
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
$ 15,000
Indirect labor
75,000
Power
15,000
Maintenance
30,000
135,000
Total variable overhead costs
Fixed overhead costs
24,000
Depreciation-Building
Depreciation-Machinery
70,000
Taxes and insurance
16,000
Supervisory salaries.
254,500
Total fixed overhead costs
364,500
Total overhead costs
$ 499,500
The company incurred the following actual costs when it operated at 75% of capacity in October.
Direct materials (46,000 pounds @ $4.20 per pound)
Direct labor (19,000 hours @ $12.10 per hour)
$ 193,200
229,900
Overhead costs
Indirect materials
$ 41,700
Indirect labor
176,600
Power
17,250
Maintenance
34,500
24,000
Depreciation-Building
Depreciation-Machinery
94,500
14,400
Taxes and insurance
Supervisory salaries.
254,500
657,450
Total costs
$ 1,080,550
Transcribed Image Text:Expected production volume
Production level achieved
Volume Variance
Variable overhead costs
Fixed overhead costs
Total overhead costs
Volume Variance
Volume variance
Total overhead variance
ANTUAN COMPANY
Overhead Variance Report
For Month Ended October 31
Flexible Budget Actual Results Variances Favorable/Unfavorable
12
$
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