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Antuan Company set the following standard costs per unit for its product. Direct materials (5.0 pounds @ $4.00 per pound) Direct labor (1.7 hours @ $10.00 per hour) Overhead (1.7 hours @ $18.50 per hour) $ 20.00 17.00 31.45 Standard cost per unit $ 68.45 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 an 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 $ 15,000 75,000 15,000 30,000 135,000 23,000 71,000 16,000 226,750

Antuan Company set the following standard costs per unit for its product. Direct materials (5.0 pounds @ $4.00 per pound) Direct labor (1.7 hours @ $10.00 per hour) Overhead (1.7 hours @ $18.50 per hour) $ 20.00 17.00 31.45 Standard cost per unit $ 68.45 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 an 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 $ 15,000 75,000 15,000 30,000 135,000 23,000 71,000 16,000 226,750

FINANCIAL ACCOUNTING
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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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.

 

Supervisory salaries Total fixed overhead costs Total overhead costs The company incurred the following actual costs when it operated at 75% of capacity in October Direct materials (75,500 pounds @ $4.18 per pound) Direct labor (21,eee hours @ $18.20 per hour) Overhead costs Indirect materials Indirect labor Pover Maintenance 226,750 336,750 $ 471,758 Depreciation-Building Depreciation Machinery Taxes and insurance Supervisory salaries Total costs $ 41,400 176,950 17,250 34,500 23,000 95,850 14,400 226,750 $ 309,550 214,200 430, 100 $ 1,153,850
Transcribed Image Text:Supervisory salaries Total fixed overhead costs Total overhead costs The company incurred the following actual costs when it operated at 75% of capacity in October Direct materials (75,500 pounds @ $4.18 per pound) Direct labor (21,eee hours @ $18.20 per hour) Overhead costs Indirect materials Indirect labor Pover Maintenance 226,750 336,750 $ 471,758 Depreciation-Building Depreciation Machinery Taxes and insurance Supervisory salaries Total costs $ 41,400 176,950 17,250 34,500 23,000 95,850 14,400 226,750 $ 309,550 214,200 430, 100 $ 1,153,850
Antuan Company set the following standard costs per unit for its product. Direct materials (5.0 pounds @ $4.00 per pound) Direct labor (1.7 hours @ $18.00 per hour) $ 20.00 17.00 31.45 Overhead (1.7 hours @ $18.50 per hour) Standard cost per unit $ 68.45 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 $ 15,000 75,000 15,000 30,000 135,000 23,000 71,000 16,000 226,750
Transcribed Image Text:Antuan Company set the following standard costs per unit for its product. Direct materials (5.0 pounds @ $4.00 per pound) Direct labor (1.7 hours @ $18.00 per hour) $ 20.00 17.00 31.45 Overhead (1.7 hours @ $18.50 per hour) Standard cost per unit $ 68.45 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 $ 15,000 75,000 15,000 30,000 135,000 23,000 71,000 16,000 226,750
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