The following information applies to the questions displayed below.] 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 (2.0 hrs. @ $12.00 per hr.) 24.00 Overhead (2.0 hrs. @ $18.50 per hr.) 37.00 Total standard cost $ 76.00 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 45,000 Total variable overhead costs $ 165,000 Fixed overhead costs Depreciation—Building 24,000 Depreciation—Machinery 70,000 Taxes and insurance 17,000 Supervision 279,000 Total fixed overhead costs 390,000 Total overhead costs $ 555,000 The company incurred the following actual costs when it operated at 75% of capacity in October. Direct materials (45,500 Ibs. @ $5.20 per lb.) $ 236,600 Direct labor (22,000 hrs. @ $12.30 per hr.) 270,600 Overhead costs Indirect materials $ 41,100 Indirect labor 176,400 Power 17,250 Repairs and maintenance 51,750 Depreciation—Building 24,000 Depreciation—Machinery 94,500 Taxes and insurance 15,300 Supervision 279,000 699,300 Total costs $ 1,206,500 rev: 04_27_2020_QC_CS-209738

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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The following information applies to the questions displayed below.]

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 (2.0 hrs. @ $12.00 per hr.)		24.00
Overhead (2.0 hrs. @ $18.50 per hr.)		37.00
Total standard cost	$	76.00

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		45,000
Total variable overhead costs			$	165,000
Fixed overhead costs
Depreciation—Building		24,000
Depreciation—Machinery		70,000
Taxes and insurance		17,000
Supervision		279,000
Total fixed overhead costs				390,000
Total overhead costs			$	555,000

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


Direct materials (45,500 Ibs. @ $5.20 per lb.)			$	236,600
Direct labor (22,000 hrs. @ $12.30 per hr.)				270,600
Overhead costs
Indirect materials	$	41,100
Indirect labor		176,400
Power		17,250
Repairs and maintenance		51,750
Depreciation—Building		24,000
Depreciation—Machinery		94,500
Taxes and insurance		15,300
Supervision		279,000		699,300
Total costs			$	1,206,500

rev: 04_27_2020_QC_CS-209738

Required information
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Required information
Required:
182. Prepare flexible overhead budgets for October showing the amounts of each variable and fixed cost at the 65%, 75%, and 85%
capacity levels and classify all items listed in the fixed budget as variable or fixed.
ANTUAN COMPANY
Flexible Overhead Budgets
For Month Ended October 31
Flexible Budget
Flexible Budget for
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per Unit
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capacity
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