Antuan Company set the following standard costs per unit for its product. Direct materials (4.0 pounds @ $5.00 per pound) Direct labor (1.9 hours@ $10.00 per hour) Overhead (1.9 hours @ $18.50 per hour) $ 20.00 19.00 35.15 Standard cost per unit $ 74.15 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 $ 15,000 75,000 15,000 30,000 135,000 The company incurred the following actual costs when it operated at 75% of capacity in October. Direct materials (61,000 pounds @ $5.20 per pound) $ 317,200 193,800 Direct labor (19,000 hours @ $10.20 per hour) Overhead costs Depreciation-Building Depreciation-Machinery Taxes and insurance Supervisory salaries Total costs 24,000 70,000 16,000 282,250 392,250 $ 527,250 $ 41,100 176,500 17,250 34,500 24,000 94,500 14,400 282,250 684,500 $ 1,195,500
Antuan Company set the following standard costs per unit for its product. Direct materials (4.0 pounds @ $5.00 per pound) Direct labor (1.9 hours@ $10.00 per hour) Overhead (1.9 hours @ $18.50 per hour) $ 20.00 19.00 35.15 Standard cost per unit $ 74.15 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 $ 15,000 75,000 15,000 30,000 135,000 The company incurred the following actual costs when it operated at 75% of capacity in October. Direct materials (61,000 pounds @ $5.20 per pound) $ 317,200 193,800 Direct labor (19,000 hours @ $10.20 per hour) Overhead costs Depreciation-Building Depreciation-Machinery Taxes and insurance Supervisory salaries Total costs 24,000 70,000 16,000 282,250 392,250 $ 527,250 $ 41,100 176,500 17,250 34,500 24,000 94,500 14,400 282,250 684,500 $ 1,195,500
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.
Direct materials (4.0 pounds @ $5.00 per pound)
Direct labor (1.9 hours @ $10.00 per hour)
Overhead (1.9 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
$ 15,000
75,000
Depreciation-Building
Depreciation-Machinery
Taxes and insurance
Supervisory salaries
Total costs
15,000
30,000
135,000
$ 20.00
19.00
35.15
$ 74.15
24,000
70,000
16,000
282, 250
392,250
$ 527,250
The company incurred the following actual costs when it operated at 75% of capacity in October.
Direct materials (61,000 pounds @ $5.20 per pound)
$ 317,200
193,800
Direct labor (19,000 hours @ $10.20 per hour)
Overhead costs
$ 41,100
176,500
17,250
34,500
24,000
94,500
14,400
282, 250
684,500
$ 1,195,500
Transcribed Image Text:2. Compute the direct materials variance, including its price and quantity variances.
Note: Indicate the effect of each variance by selecting favorable, unfavorable, or no variance.
Actual Cost
0
$
0
$
0
0
$
0
Standard Cost
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