Antuan Company set the following standard costs per unit for its product. Direct materials (3.0 pounds @ $5.00 per pound) Direct labor (1.6 hours @ $13.00 per hour) Overhead (1.6 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 Fixed overhead costs Depreciation-Building Depreciation-Machinery Taxes and insurance Supervisory salaries Total fixed overhead costs Total overhead costs Indirect materials Indirect labor Power $ 15,000 75,000 Maintenance 15,000 30,000 135,000 The company incurred the following actual costs when it operated at 75% of capacity in October. Direct materials (46,500 pounds @ $5.20 per pound) Direct labor (20,000 hours @ $13.30 per hour) Overhead costs Depreciation-Building Depreciation-Machinery Taxes and insurance Supervisory salaries Total costs 25,000 71,000 17,000 196,000 309,000 $ 444,000 $ 15.00 20.80 29.60 $65.48 $ 41,600 176,700 17,250 34,500 25,000 95,850 15,300 196,000 $ 241,800 266,000 602,200 $ 1,110,000 ompute the direct labor variance, including its rate and efficiency variances. : Indicate the effect of each variance by selecting favorable, unfavorable, or no nce. Round "Rate per hour" answers to two decimal places.
Antuan Company set the following standard costs per unit for its product. Direct materials (3.0 pounds @ $5.00 per pound) Direct labor (1.6 hours @ $13.00 per hour) Overhead (1.6 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 Fixed overhead costs Depreciation-Building Depreciation-Machinery Taxes and insurance Supervisory salaries Total fixed overhead costs Total overhead costs Indirect materials Indirect labor Power $ 15,000 75,000 Maintenance 15,000 30,000 135,000 The company incurred the following actual costs when it operated at 75% of capacity in October. Direct materials (46,500 pounds @ $5.20 per pound) Direct labor (20,000 hours @ $13.30 per hour) Overhead costs Depreciation-Building Depreciation-Machinery Taxes and insurance Supervisory salaries Total costs 25,000 71,000 17,000 196,000 309,000 $ 444,000 $ 15.00 20.80 29.60 $65.48 $ 41,600 176,700 17,250 34,500 25,000 95,850 15,300 196,000 $ 241,800 266,000 602,200 $ 1,110,000 ompute the direct labor variance, including its rate and efficiency variances. : Indicate the effect of each variance by selecting favorable, unfavorable, or no nce. Round "Rate per hour" answers to two decimal places.
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter9: Standard Costing: A Functional-based Control Approach
Section: Chapter Questions
Problem 33P: Business Specialty, Inc., manufactures two staplers: small and regular. The standard quantities of...
Related questions
Concept explainers
Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
Topic Video
Question
Do not give solution in image
Transcribed Image Text:Antuan Company set the following standard costs per unit for its product.
Direct materials (3.0 pounds @ $5.00 per pound)
Direct labor (1.6 hours @ $13.00 per hour)
Overhead (1.6 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
Power
Maintenance
The company incurred the following actual costs when it operated at 75%
of capacity in October.
Direct materials (46,500 pounds @ $5.20 per pound)
Direct labor (20,000 hours @ $13.30 per hour)
Overhead costs
Depreciation-Building
Depreciation Machinery
Taxes and insurance
Supervisory salaries
Total costs
$ 15,000
75,000
Actual Cost
15,000
30,000
135,000
25,000
71,000
17,000
196,000
309,000
$ 444,000
$
$15.00
20.80
29.60
$65.48
0
>mpute the direct labor variance, including its rate and efficiency variances.
: Indicate the effect of each variance by selecting favorable, unfavorable, or no
ince. Round "Rate per hour" answers to two decimal places.
$
$ 41,600
176,700
17,250
34,500
25,000
95,850
15,300
196,000
0
0
$ 241,800
266,000
602,200
$ 1,110,000
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
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.Recommended textbooks for you
Cornerstones of Cost Management (Cornerstones Ser…
Accounting
ISBN:
9781305970663
Author:
Don R. Hansen, Maryanne M. Mowen
Publisher:
Cengage Learning
Managerial Accounting: The Cornerstone of Busines…
Accounting
ISBN:
9781337115773
Author:
Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:
Cengage Learning
Managerial Accounting
Accounting
ISBN:
9781337912020
Author:
Carl Warren, Ph.d. Cma William B. Tayler
Publisher:
South-Western College Pub
Cornerstones of Cost Management (Cornerstones Ser…
Accounting
ISBN:
9781305970663
Author:
Don R. Hansen, Maryanne M. Mowen
Publisher:
Cengage Learning
Managerial Accounting: The Cornerstone of Busines…
Accounting
ISBN:
9781337115773
Author:
Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:
Cengage Learning
Managerial Accounting
Accounting
ISBN:
9781337912020
Author:
Carl Warren, Ph.d. Cma William B. Tayler
Publisher:
South-Western College Pub
Principles of Accounting Volume 2
Accounting
ISBN:
9781947172609
Author:
OpenStax
Publisher:
OpenStax College
Principles of Cost Accounting
Accounting
ISBN:
9781305087408
Author:
Edward J. Vanderbeck, Maria R. Mitchell
Publisher:
Cengage Learning