Antuan Company set the following standard costs per unit for its product. Direct materials (4.0 pounds @ $5.00 per pound) Direct labor (1.7 hours @ $11.00 per hour) Overhead (1.7 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 15,000 45,000 150,000 Depreciation-Building Depreciation-Machinery Taxes and insurance Supervisory salaries Total costs 24,000 71,000 $ 20.00 18.70 31.45 $ 70.15 16,000 210,750 321,750 $ 471,750 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) $ 317,200 237,300 Direct labor (21,000 hours @ $11.30 per hour) Overhead costs $ 41,100 176, 150 17,250 51,750 24,000 95,850 14,400 210, 750 631,250 $ 1,185,750
Antuan Company set the following standard costs per unit for its product. Direct materials (4.0 pounds @ $5.00 per pound) Direct labor (1.7 hours @ $11.00 per hour) Overhead (1.7 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 15,000 45,000 150,000 Depreciation-Building Depreciation-Machinery Taxes and insurance Supervisory salaries Total costs 24,000 71,000 $ 20.00 18.70 31.45 $ 70.15 16,000 210,750 321,750 $ 471,750 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) $ 317,200 237,300 Direct labor (21,000 hours @ $11.30 per hour) Overhead costs $ 41,100 176, 150 17,250 51,750 24,000 95,850 14,400 210, 750 631,250 $ 1,185,750
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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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.
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Transcribed Image Text:Required:
1. Prepare flexible overhead budgets for October showing amounts of each variable and fixed cost at the 65%, 75%, and 85% capacity
levels.
ANTUAN COMPANY
Flexible Overhead Budgets
For Month Ended October 31 Variable Amount Total Fixed
per Unit
Cost
Production (in units)
Variable overhead costs
Fixed overhead costs
Total overhead costs
Flexible Budget at Capacity Level of
65%
75%
85%
![Required information
[The following information applies to the questions displayed below.]
Antuan Company set the following standard costs per unit for its product.
Direct materials (4.0 pounds @ $5.00 per pound)
Direct labor (1.7 hours @ $11.00 per hour)
Overhead (1.7 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
15,000
45,000
150,000
Depreciation-Building
Depreciation-Machinery
Taxes and insurance
Supervisory salaries
Total costs
$20.00
18.70
31.45
$ 70.15
24,000
71,000
16,000
210,750
321,750
$ 471,750
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)
Direct labor (21,000 hours @ $11.30 per hour)
$ 317,200
237,300
Overhead costs.
$41,100
176,150
17,250
51,750
24,000
95,850
14,400
210, 750
631,250
$ 1,185,750](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fbe5dee22-cf52-49a9-a045-9b6fb9afe878%2F9e07b53b-c386-452e-a7b9-4dee0963aae5%2F9ggiutm_processed.png&w=3840&q=75)
Transcribed Image Text:Required information
[The following information applies to the questions displayed below.]
Antuan Company set the following standard costs per unit for its product.
Direct materials (4.0 pounds @ $5.00 per pound)
Direct labor (1.7 hours @ $11.00 per hour)
Overhead (1.7 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
15,000
45,000
150,000
Depreciation-Building
Depreciation-Machinery
Taxes and insurance
Supervisory salaries
Total costs
$20.00
18.70
31.45
$ 70.15
24,000
71,000
16,000
210,750
321,750
$ 471,750
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)
Direct labor (21,000 hours @ $11.30 per hour)
$ 317,200
237,300
Overhead costs.
$41,100
176,150
17,250
51,750
24,000
95,850
14,400
210, 750
631,250
$ 1,185,750
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