[The following information applies to the questions displayed below.] 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) 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 24,000 Depreciation-Building Depreciation-Machinery 80,000 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 24,000 75,000 Depreciation-Building Depreciation-Machinery Taxes and insurance Supervisory salaries 11,500 89,000 560,500 Total costs $ 1,550,725
[The following information applies to the questions displayed below.] 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) 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 24,000 Depreciation-Building Depreciation-Machinery 80,000 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 24,000 75,000 Depreciation-Building Depreciation-Machinery Taxes and insurance Supervisory salaries 11,500 89,000 560,500 Total costs $ 1,550,725
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Concept explainers
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
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Question
![[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)
$ 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
Total variable overhead costs
360,000
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)
$ 464,100
526, 125
Direct labor (30,500 hours @ $17.25 per hour)
Overhead costs
Indirect materials
$ 44,250
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](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F0ece9d0d-a73d-49df-8564-6baad6491ed6%2F7c74c1bd-8f49-4861-90ec-cdb856bcc133%2Fz7iwjn9_processed.png&w=3840&q=75)
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)
$ 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
Total variable overhead costs
360,000
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)
$ 464,100
526, 125
Direct labor (30,500 hours @ $17.25 per hour)
Overhead costs
Indirect materials
$ 44,250
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:Required:
1. Prepare flexible overhead budgets for October showing amounts of each variable and fixed cost at the 65%, 75%, and 85% capacity
levels.
ANTUAN COMPANY
Flexible Overhead Budgets
Flexible Budget at Capacity Level of
For Month Ended October 31
65%
75%
85%
Production (in units)
Variable overhead costs
Fixed overhead costs
Total overhead costs
Variable Amount Total Fixed
per Unit
Cost
0
$
$
0
$
$
0 $
0 $
0 $
0 $
0
0
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