The company incurred the following actual costs when it operated at Direct materials (91,000 pounds @ $5.10 per pound) Direct labor (30,500 hours @ $17.25 per hour) Overhead costs Indirect materials Indirect labor Power Maintenance Depreciation-Building Depreciation-Machinery Taxes and insurance Supervisory salaries Total costs Required information Expected production volume Production level achieved Volume variance Variable overhead costs 4. Prepare a detailed overhead variance report that shows the variance for individual items of overhead. (Indicate th variance by selecting favorable, unfavorable, or no variance.) Fixed overhead costs ANTUAN COMPANY Overhead Variance Report For Month Ended October 31 Overhead Variance Report For Month Ended October 31 Flexible Budget Actual Results $ 44,250 177,750 43,000 96,000 24,000 75,000 Variances 11,500 89,000 $ 464,100 526, 125 560, 500 $1,550,725 Favorable/Unfavorable
The company incurred the following actual costs when it operated at Direct materials (91,000 pounds @ $5.10 per pound) Direct labor (30,500 hours @ $17.25 per hour) Overhead costs Indirect materials Indirect labor Power Maintenance Depreciation-Building Depreciation-Machinery Taxes and insurance Supervisory salaries Total costs Required information Expected production volume Production level achieved Volume variance Variable overhead costs 4. Prepare a detailed overhead variance report that shows the variance for individual items of overhead. (Indicate th variance by selecting favorable, unfavorable, or no variance.) Fixed overhead costs ANTUAN COMPANY Overhead Variance Report For Month Ended October 31 Overhead Variance Report For Month Ended October 31 Flexible Budget Actual Results $ 44,250 177,750 43,000 96,000 24,000 75,000 Variances 11,500 89,000 $ 464,100 526, 125 560, 500 $1,550,725 Favorable/Unfavorable
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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.
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Transcribed Image Text: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
Indirect materials
Indirect labor
Power
Maintenance
Depreciation-Building
Depreciation-Machinery
Taxes and insurance)
Supervisory salaries
Total costs
Required information
Expected production volume
Production level achieved
Volume variance
Variable overhead costs
4. Prepare a detailed overhead variance report that shows the variance for individual items of overhead. (Indicate the
variance by selecting favorable, unfavorable, or no variance.)
Fixed overhead costs
ANTUAN COMPANY
Overhead Variance Report
For Month Ended October 31
Overhead Variance Report
For Month Ended October 31
Flexible Budget Actual Results
$ 44,250
177,750
43,000
96,000
24,000
Variances
75,000
11,500
89,000
$ 464, 100
526, 125
560, 500,
$ 1,550,725
Favorable/Unfavorable
Transcribed Image Text: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
$ 45,000
180,000
45,000
90,000
360,000
24,000
80,000
12,000
79,000
195,000
$ 555,000
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