Antuan Company set the following standard costs per unit for its product. Direct materials (6 pounds @ $5 per pound) $ 30 Direct labor (2 hours @ $17 per hour) 34 Overhead (2 hours @ $18.50 per hour) 37 Standard cost per unit $ 101 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 $ 45,000 180,000 Indirect labor Power 45,000 Maintenance 90,000 360,000 Total variable overhead costs Fixed overhead costs 24,000 Depreciation-Building Depreciation-Machinery Taxes and insurance. 80,000 12,000 Supervisory salaries. 79,000 Total fixed overhead costs 195,000 Total overhead costs $ 555,000 The company incurred the following actual costs when it operated at 75% of capacity in October. Direct materials (91,000 pounds @ $5.10 per pound) Direct labor (30,500 hours @ $17.25 per hour) $ 464,100 526,125 Overhead costs Indirect materials $ 44,250 Indirect labor 177,750 Power 43,000 Maintenance 96,000 24,000 Depreciation-Building Depreciation-Machinery 75,000 Taxes and insurance 11,500 Supervisory salaries. 89,000 560,500 Total costs $ 1,550,725
Antuan Company set the following standard costs per unit for its product. Direct materials (6 pounds @ $5 per pound) $ 30 Direct labor (2 hours @ $17 per hour) 34 Overhead (2 hours @ $18.50 per hour) 37 Standard cost per unit $ 101 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 $ 45,000 180,000 Indirect labor Power 45,000 Maintenance 90,000 360,000 Total variable overhead costs Fixed overhead costs 24,000 Depreciation-Building Depreciation-Machinery Taxes and insurance. 80,000 12,000 Supervisory salaries. 79,000 Total fixed overhead costs 195,000 Total overhead costs $ 555,000 The company incurred the following actual costs when it operated at 75% of capacity in October. Direct materials (91,000 pounds @ $5.10 per pound) Direct labor (30,500 hours @ $17.25 per hour) $ 464,100 526,125 Overhead costs Indirect materials $ 44,250 Indirect labor 177,750 Power 43,000 Maintenance 96,000 24,000 Depreciation-Building Depreciation-Machinery 75,000 Taxes and insurance 11,500 Supervisory salaries. 89,000 560,500 Total costs $ 1,550,725
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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
Transcribed Image Text:Antuan Company set the following standard costs per unit for its product.
Direct materials (6 pounds @ $5 per pound)
$ 30
Direct labor (2 hours @ $17 per hour)
34
Overhead (2 hours @ $18.50 per hour)
37
Standard cost per unit
$ 101
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
$ 45,000
Indirect labor
180,000
Power
45,000
Maintenance
90,000
360,000
Total variable overhead costs
Fixed overhead costs
Depreciation-Building
24,000
80,000
Depreciation-Machinery
Taxes and insurance
12,000
Supervisory salaries
79,000
Total fixed overhead costs.
195,000
Total overhead costs
$ 555,000
The company incurred the following actual costs when it operated at 75% of capacity in October.
Direct materials (91,000 pounds @ $5.10 per pound)
Direct labor (30,500 hours @ $17.25 per hour)
$ 464,100
526, 125
Overhead costs
$ 44,250
Indirect materials
Indirect labor
177,750
Power
43,000
Maintenance
96,000
Depreciation-Building
24,000
75,000
Depreciation-Machinery
Taxes and insurance
Supervisory salaries
11,500
89,000
560,500
Total costs
$ 1,550,725
Transcribed Image Text:Expected production volume
Production level achieved
Volume variance
Variable overhead costs
▶▶▶
▶▶▶
Fixed overhead costs
▶▶▶▶
▶▶▶▶
▶▶▶▶
Total overhead costs
Volume Variance
Volume variance
Total overhead variance
ANTUAN COMPANY
Overhead Variance Report
For Month Ended October 31
Flexible Budget Actual Results Variances Favorable/Unfavorable
$
0
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 with 2 images
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
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education