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 e $12.00 per hour) Overhead (1.7 hours @ $18.50 per hour) Standard cost per unit $ 20.00 20.40 31.45 $ 71.85 The standard overhead rate ($18.50 per direct labor hour) is based on a predicted activity level capacity of 20,000 units per month. Following are the company's budgeted overhead costs per level. Overhead Budget (75% Capacity) Variable overhead costs Indirect materials Indirect labor Power Maintenance Total variable overhead costs $ 15,000 75,000 15,000 30,000 135,000

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 e $12.00 per hour) Overhead (1.7 hours @ $18.50 per hour) Standard cost per unit $ 20.00 20.40 31.45 $ 71.85 The standard overhead rate ($18.50 per direct labor hour) is based on a predicted activity level capacity of 20,000 units per month. Following are the company's budgeted overhead costs per level. Overhead Budget (75% Capacity) Variable overhead costs Indirect materials Indirect labor Power Maintenance Total variable overhead costs $ 15,000 75,000 15,000 30,000 135,000

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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Jojo Company employs standard absobrtion system for product costing. The standard cost of this product is as follows: Raw materials- P14.50; Direct labor for 2 hours @ 8/hr is P16; Manufacturing overhead for 2 hours @ 11/hr is P22. The total cost/ unit (14.50 + 16 + 22) = P52.50. The manufacturing overhead rate is based upon normal annual activity level of 600,000 direct labor hours. The company planned to produce 25,000 units each month during 2020. Budgeted factory overhead for 2020 is composed of P3,600,000 variable and P3,000,000 fixed. During April 2021, 26,000 units of product were produced using 53,500 direct labor hours at a cost of P433,350. ACtual manufcaturing overhead for the month was P260,000 fixed and P315,000 variable. The total manufcaturing overhead applied during April was P572,000. The variable overhead spending variance must be:
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Ashvin
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A -6
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