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Antuan Company set the following standard costs per unit for its product. Direct materials (3.0 pounds @ $5.00 per pound) Direct labor (1.8 hours @ $14.00 per hour) Overhead (1.8 hours @ $18.50 per hour) Standard cost per unit 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 Indirect labor Power Maintenance Total variable overhead costs Fixed overhead costs Depreciation Building Depreciation Machinery Taxes and insurance Supervisory salaries. Total fixed overhead costs Total overhead costs Indirect materials Indirect labor Dver Power $ 15,000 75,860 15,800 30, 800 135,000 Maintenance Depreciation Building Depreciation Machinery Taxes and insurance Supervisory salaries Total costs S 15.00 25.20 33.30 S 73.50 24,000 71,900 18,000 251, 500 364,500 $ 499, 500 The company incurred the following actual costs when it operated at 75% of capacity in October. Direct materials (46, 580 pounds @ 35.18 per pound) Direct labor (19,698 hours $14.20 per hour) $ 237,150 269, 880 Overhead costs $ 41,760 176, 950 17,250 34,500 24,000 95, 850 16, 200 251, 500 657,950 $ 1,164,980 2. Compute the direct materials variance, including its price and quantity variances. (Indicate the effect of each variance by selecting favorable, unfavorable, or no variance.) Actual Cost Standard Cost

Antuan Company set the following standard costs per unit for its product. Direct materials (3.0 pounds @ $5.00 per pound) Direct labor (1.8 hours @ $14.00 per hour) Overhead (1.8 hours @ $18.50 per hour) Standard cost per unit 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 Indirect labor Power Maintenance Total variable overhead costs Fixed overhead costs Depreciation Building Depreciation Machinery Taxes and insurance Supervisory salaries. Total fixed overhead costs Total overhead costs Indirect materials Indirect labor Dver Power $ 15,000 75,860 15,800 30, 800 135,000 Maintenance Depreciation Building Depreciation Machinery Taxes and insurance Supervisory salaries Total costs S 15.00 25.20 33.30 S 73.50 24,000 71,900 18,000 251, 500 364,500 $ 499, 500 The company incurred the following actual costs when it operated at 75% of capacity in October. Direct materials (46, 580 pounds @ 35.18 per pound) Direct labor (19,698 hours $14.20 per hour) $ 237,150 269, 880 Overhead costs $ 41,760 176, 950 17,250 34,500 24,000 95, 850 16, 200 251, 500 657,950 $ 1,164,980 2. Compute the direct materials variance, including its price and quantity variances. (Indicate the effect of each variance by selecting favorable, unfavorable, or no variance.) Actual Cost Standard Cost

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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### Antuan Company Cost Analysis **Standard Costs for Product Unit:** 1. **Direct Materials (3.0 pounds @ $5.00 per pound)**: $15.00 2. **Direct Labor (1.8 hours @ $14.29 per hour)**: $25.80 3. **Overhead (1.8 hours @ $18.50 per hour)**: $33.30 **Total Standard Cost Per Unit**: $74.10 --- **Overhead Budget (75% Capacity):** - **Variable Overhead Costs**: - Indirect materials: $15,800 - Indirect labor: $75,800 - Power: $15,800 - Maintenance: $30,800 **Total Variable Overhead Costs**: $138,200 - **Fixed Overhead Costs**: - Depreciation—Building: $24,800 - Depreciation—Machinery: $71,800 - Taxes and insurance: $91,800 - Supervisory salaries: $251,800 **Total Fixed Overhead Costs**: $440,200 **Total Overhead Costs**: $578,400 --- **Actual Costs (75% Capacity in October):** 1. **Direct Materials (46,500 pounds @ $5.10 per pound)**: $237,150 2. **Direct Labor (19,980 hours @ $14.29 per hour)**: $285,880 **Overhead Costs**: - Indirect materials: $41,700 - Indirect labor: $176,950 - Power: $17,350 - Maintenance: $34,890 - Depreciation—Building: $24,600 - Depreciation—Machinery: $95,580 - Taxes and insurance: $16,280 - Supervisory salaries: $251,580 **Total Overhead Costs**: $657,950 **Total Costs**: $1,164,980 --- ### 2. Direct Materials Variance Computation To calculate variances, compare the actual and standard costs. - **Price Variance**: Difference in cost per unit. - **Quantity Variance**: Difference in the number of units used. ### Explanation of Tables The tables provided compare **actual costs** against **standard costs** for performance analysis. Highlight
Transcribed Image Text:### Antuan Company Cost Analysis **Standard Costs for Product Unit:** 1. **Direct Materials (3.0 pounds @ $5.00 per pound)**: $15.00 2. **Direct Labor (1.8 hours @ $14.29 per hour)**: $25.80 3. **Overhead (1.8 hours @ $18.50 per hour)**: $33.30 **Total Standard Cost Per Unit**: $74.10 --- **Overhead Budget (75% Capacity):** - **Variable Overhead Costs**: - Indirect materials: $15,800 - Indirect labor: $75,800 - Power: $15,800 - Maintenance: $30,800 **Total Variable Overhead Costs**: $138,200 - **Fixed Overhead Costs**: - Depreciation—Building: $24,800 - Depreciation—Machinery: $71,800 - Taxes and insurance: $91,800 - Supervisory salaries: $251,800 **Total Fixed Overhead Costs**: $440,200 **Total Overhead Costs**: $578,400 --- **Actual Costs (75% Capacity in October):** 1. **Direct Materials (46,500 pounds @ $5.10 per pound)**: $237,150 2. **Direct Labor (19,980 hours @ $14.29 per hour)**: $285,880 **Overhead Costs**: - Indirect materials: $41,700 - Indirect labor: $176,950 - Power: $17,350 - Maintenance: $34,890 - Depreciation—Building: $24,600 - Depreciation—Machinery: $95,580 - Taxes and insurance: $16,280 - Supervisory salaries: $251,580 **Total Overhead Costs**: $657,950 **Total Costs**: $1,164,980 --- ### 2. Direct Materials Variance Computation To calculate variances, compare the actual and standard costs. - **Price Variance**: Difference in cost per unit. - **Quantity Variance**: Difference in the number of units used. ### Explanation of Tables The tables provided compare **actual costs** against **standard costs** for performance analysis. Highlight
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