Direct materials (3.0 Ibs. @ $5.00 per Ib.) $ 15.00 Direct labor (1.8 hrs. @ $12.00 per hr.)   21.60 Overhead (1.8 hrs. @ $18.50 per hr.)   33.30 Total standard cost $ 69.90   The predetermined overhead rate ($18.50 per direct labor hour) is based on an expected volume 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 $ 15,000       Indirect labor   90,000       Power   15,000       Repairs and maintenance   30,000       Total variable overhead costs       $ 150,000 Fixed overhead costs           Depreciation—Building   23,000       Depreciation—Machinery   70,000       Taxes and insurance   17,000       Supervision   239,500       Total fixed overhead costs         349,500 Total overhead costs       $ 499,500   The company incurred the following actual costs when it operated at 75% of capacity in October.               Direct materials (46,000 Ibs. @ $5.20 per lb.)       $ 239,200 Direct labor (19,000 hrs. @ $12.30 per hr.)         233,700 Overhead costs           Indirect materials $ 41,600       Indirect labor   176,500       Power   17,250       Repairs and maintenance   34,500       Depreciation—Building   23,000       Depreciation—Machinery   94,500       Taxes and insurance   15,300       Supervision   239,500     642,150 Total costs       $ 1,115,050   rev: 04_27_2020_QC_CS-209738   3. Compute the direct materials cost variance, including its price and quantity variances. (Indicate the effect of each variance by selecting  for favorable, unfavorable, and No variance.)

FINANCIAL ACCOUNTING
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Please my answer and explain incorrect.

Antuan Company set the following standard costs for one unit of its product.
 

     
Direct materials (3.0 Ibs. @ $5.00 per Ib.) $ 15.00
Direct labor (1.8 hrs. @ $12.00 per hr.)   21.60
Overhead (1.8 hrs. @ $18.50 per hr.)   33.30
Total standard cost $ 69.90
 


The predetermined overhead rate ($18.50 per direct labor hour) is based on an expected volume 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 $ 15,000      
Indirect labor   90,000      
Power  

15,000

     
Repairs and maintenance   30,000      
Total variable overhead costs       $ 150,000
Fixed overhead costs          
Depreciation—Building   23,000      
Depreciation—Machinery   70,000      
Taxes and insurance   17,000      
Supervision   239,500      
Total fixed overhead costs         349,500
Total overhead costs       $ 499,500
 


The company incurred the following actual costs when it operated at 75% of capacity in October.
 

           
Direct materials (46,000 Ibs. @ $5.20 per lb.)       $ 239,200
Direct labor (19,000 hrs. @ $12.30 per hr.)         233,700
Overhead costs          
Indirect materials $ 41,600      
Indirect labor   176,500      
Power   17,250      
Repairs and maintenance   34,500      
Depreciation—Building   23,000      
Depreciation—Machinery   94,500      
Taxes and insurance   15,300      
Supervision   239,500     642,150
Total costs       $ 1,115,050
 

rev: 04_27_2020_QC_CS-209738

 

3. Compute the direct materials cost variance, including its price and quantity variances. (Indicate the effect of each variance by selecting  for favorable, unfavorable, and No variance.)

Answer is complete but not entirely correct.
Actual Cost
Standard Cost
Actual quantity
Actual quantity O
46.000 O
Actual price
(x
Standard quantity O
Standard price
Actual price
5.20
46,000 O
5.00 O
90,000 X
5.00
239,200
230,000
450,000
$ 9,200
220,000
Direct materials price variance
9,200
Unfavorable
Direct materials quantity variance
220,000
Unfavorable
Total direct materials variance
229,200 X
Unfavorable
Transcribed Image Text:Answer is complete but not entirely correct. Actual Cost Standard Cost Actual quantity Actual quantity O 46.000 O Actual price (x Standard quantity O Standard price Actual price 5.20 46,000 O 5.00 O 90,000 X 5.00 239,200 230,000 450,000 $ 9,200 220,000 Direct materials price variance 9,200 Unfavorable Direct materials quantity variance 220,000 Unfavorable Total direct materials variance 229,200 X Unfavorable
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