Antuan Company set the following standard costs per unit for its product. $ 30 Direct materials (6 pounds @ $5 per pound) Direct labor (2 hours@ $17 per hour) Overhead (2 hours @ $18.50 per hour) 34 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 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 $ 45,000 180,000 45,000 90,000 360,000 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) Overhead costs $ 464,100 526,125 Depreciation-Building Depreciation-Machinery Taxes and insurance Supervisory salaries Total costs 24,000 80,000 12,000 79,000 195,000 $ 555,000 $ 44,250 177,750 43,000 96,000 24,000 75,000 11,500 89,000 560, 500 $ 1,550,725

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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2. Compute the direct materials variance, including its price and quantity variances. (Indicate the effect of each variance by selecting
favorable, unfavorable, or no variance.)
Actual Cost
0
$
0
$
0
0
$
0
Standard Cost
Transcribed Image Text:2. Compute the direct materials variance, including its price and quantity variances. (Indicate the effect of each variance by selecting favorable, unfavorable, or no variance.) Actual Cost 0 $ 0 $ 0 0 $ 0 Standard Cost
[The following information applies to the questions displayed below.]
Antuan Company set the following standard costs per unit for its product.
Direct materials (6 pounds @ $5 per pound)
Direct labor (2 hours @ $17 per hour)
Overhead (2 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
$ 45,000
180,000
45,000
90,000
360,000
Depreciation-Building
Depreciation-Machinery
Taxes and insurance
Supervisory salaries
Total costs
$ 30
34
37
$ 101
24,000
80,000
12,000
79,000
195,000
$ 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)
$ 464,100
526, 125
Direct labor (30,500 hours @ $17.25 per hour)
Overhead costs
$ 44,250
177,750
43,000
96,000
24,000
75,000
11,500
89,000
560,500
$ 1,550,725
Transcribed Image Text:[The following information applies to the questions displayed below.] Antuan Company set the following standard costs per unit for its product. Direct materials (6 pounds @ $5 per pound) Direct labor (2 hours @ $17 per hour) Overhead (2 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 $ 45,000 180,000 45,000 90,000 360,000 Depreciation-Building Depreciation-Machinery Taxes and insurance Supervisory salaries Total costs $ 30 34 37 $ 101 24,000 80,000 12,000 79,000 195,000 $ 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) $ 464,100 526, 125 Direct labor (30,500 hours @ $17.25 per hour) Overhead costs $ 44,250 177,750 43,000 96,000 24,000 75,000 11,500 89,000 560,500 $ 1,550,725
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