Required: 1. Prepare flexible overhead budgets for October showing amounts of each variable and fixed cost at the 65%, 75%, and 85% capacity levels. For Month Ended October 31 Production (in units) Variable overhead costs Fixed overhead costs Total overhead costs ANTUAN COMPANY Flexible Overhead Budgets Variable Amount Total Fixed per Unit Cost $ 0.00 $ Flexible Budget at Capacity Level of 65% 75% 85% $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 0
Required: 1. Prepare flexible overhead budgets for October showing amounts of each variable and fixed cost at the 65%, 75%, and 85% capacity levels. For Month Ended October 31 Production (in units) Variable overhead costs Fixed overhead costs Total overhead costs ANTUAN COMPANY Flexible Overhead Budgets Variable Amount Total Fixed per Unit Cost $ 0.00 $ Flexible Budget at Capacity Level of 65% 75% 85% $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 0
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
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Antuan Company set the following standard costs per unit for its product.
Direct materials (3.0 pounds @ $5.00 per pound)
Direct labor (1.7 hours @ $13.00 per hour)
Overhead (1.7 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
The company incurred the following actual costs when it operated at 75% of capacity in October.
Maintenance
$ 15,000
75,000
15,000
30,000
135,000
Direct materials (46,500 pounds @ $5.10 per pound)
Direct labor (21,000 hours @ $13.30 per hour)
Overhead costs
Depreciation-Building
Depreciation-Machinery
$15.00
22.10
31.45
$ 68.55
24,000
70,000
17,000
225,750
336,750
$ 471,750
Taxes and insurance
Supervisory salaries
Total costs
$ 41,450
176,450
17,250
34,500
24,000
94,500
15,300
225,750
$ 237,150
279,300
629, 200
$ 1,145,650](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fcdbead96-3503-4bf3-bb90-f78e8f640ada%2Fa5c6b3e8-9c4a-4338-8222-28fadd6d1c70%2F3kxdmf8_processed.png&w=3840&q=75)
Transcribed Image Text:Required information
[The following information applies to the questions displayed below.]
Antuan Company set the following standard costs per unit for its product.
Direct materials (3.0 pounds @ $5.00 per pound)
Direct labor (1.7 hours @ $13.00 per hour)
Overhead (1.7 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
The company incurred the following actual costs when it operated at 75% of capacity in October.
Maintenance
$ 15,000
75,000
15,000
30,000
135,000
Direct materials (46,500 pounds @ $5.10 per pound)
Direct labor (21,000 hours @ $13.30 per hour)
Overhead costs
Depreciation-Building
Depreciation-Machinery
$15.00
22.10
31.45
$ 68.55
24,000
70,000
17,000
225,750
336,750
$ 471,750
Taxes and insurance
Supervisory salaries
Total costs
$ 41,450
176,450
17,250
34,500
24,000
94,500
15,300
225,750
$ 237,150
279,300
629, 200
$ 1,145,650
Transcribed Image Text:Required:
1. Prepare flexible overhead budgets for October showing amounts of each variable and fixed cost at the 65%, 75%, and 85% capacity
levels.
For Month Ended October 31
Production (in units)
Variable overhead costs
Fixed overhead costs
Total overhead costs
ANTUAN COMPANY
$
Flexible Overhead Budgets
Variable Amount Total Fixed
per Unit
Cost
0.00
$
0
Flexible Budget at Capacity Level of
65%
75%
85%
$
$
0 $
0
$
0 $
0 $
0
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