Antuan Company set the following standard costs per unit for its product. Direct materials (3.0 pounds @ 35.00 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. Variable overhead costs Overhead Budget (75% Capacity) 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 Power 24,900 71,000 18,000 251, 500 $ 499,500 The company incurred the following actual costs when it operated at 75% of capacity in October. Direct materials (46, 500 pounds 0 35.10 per pound) Direct labor (19,000 hours 0 $14.20 per hour) Overhead costs Maintenance Depreciation Building Depreciation Machinery Taxes and insurance Supervisory salaries Total costs Expected production volume Production level achieved Volume Variance Variable overhead costs Fixed overhead costs Total overhead costs Volume Variance $ 15,000 75,000 15,000 30,000 135,800 $ 15.00 25.20 33.30 Volume variance Total overhead variance 4. Prepare a detailed overhead variance report that shows the variances for individual items of overhead. (Indicate the effect of each variance by selecting favorable, unfavorable, or no variance.) ANTUAN COMPANY Overhead Variance Report For Month Ended October 31 $ 41,700 176, 950 17,250 34,500 24,000 Flexible Budget Actual Results Variances 95, 850 16, 200 251, 500 $ 237,150 269,880 657,950 $ 1,164,980 Favorable/Unfavorable
Antuan Company set the following standard costs per unit for its product. Direct materials (3.0 pounds @ 35.00 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. Variable overhead costs Overhead Budget (75% Capacity) 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 Power 24,900 71,000 18,000 251, 500 $ 499,500 The company incurred the following actual costs when it operated at 75% of capacity in October. Direct materials (46, 500 pounds 0 35.10 per pound) Direct labor (19,000 hours 0 $14.20 per hour) Overhead costs Maintenance Depreciation Building Depreciation Machinery Taxes and insurance Supervisory salaries Total costs Expected production volume Production level achieved Volume Variance Variable overhead costs Fixed overhead costs Total overhead costs Volume Variance $ 15,000 75,000 15,000 30,000 135,800 $ 15.00 25.20 33.30 Volume variance Total overhead variance 4. Prepare a detailed overhead variance report that shows the variances for individual items of overhead. (Indicate the effect of each variance by selecting favorable, unfavorable, or no variance.) ANTUAN COMPANY Overhead Variance Report For Month Ended October 31 $ 41,700 176, 950 17,250 34,500 24,000 Flexible Budget Actual Results Variances 95, 850 16, 200 251, 500 $ 237,150 269,880 657,950 $ 1,164,980 Favorable/Unfavorable
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
6
Transcribed Image Text:Antuan Company set the following standard costs per unit for its product.
$ 15.00
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)
25.20
33.30
Standard cost per unit
$ 73.50
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.
Variable overhead costs
Overhead Budget (75% Capacity)
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
Power
The company incurred the following actual costs when it operated at 75% of capacity in October.
Direct materials (46, 580 pounds @ $5.10 per pound)
Direct labor (19,000 hours
$14.20 per hour)
$ 237,150
269, 880
Overhead costs
Maintenance
Depreciation Building
Depreciation Machinery
Taxes and insurance
Supervisory salaries
Total costs
Expected production volume
Production level achieved
Volume Variance
Variable overhead costs
Fixed overhead costs
Total overhead costs
Volume Variance
$ 15,800
75,860
15,800
30, 800
135,868
24,860
71,900
18,800
251, 500
364,588
$ 499, 500
Volume variance
Total overhead variance
4. Prepare a detailed overhead variance report that shows the variances for individual items of overhead. (Indicate the effect of each
variance by selecting favorable, unfavorable, or no variance.)
ANTUAN COMPANY
Overhead Variance Report
For Month Ended October 31
$ 41,700
176, 958
Flexible Budget Actual Results Variances
17,258
34,500
24,800
95, 850
16, 200
251, 500
657, 950
$ 1,164,980
Favorable/Unfavorable
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