Question

HOW DO I CALCULATE?

Antuan Company set the following standard costs for one unit of its product. Direct materials (3.0 Ibs. $6.00 per Ib.) Direct labor (1.6 hrs. e $13.00 per hr.) Overhead (1.6 hrs. $18.50 per hr. $18.00 20.80 29.60 $68.40 Total standard cost 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 (758 Capacity) Variable overhe ad costs Indirect materials $ 15,000 Indirect labor 75,000 Power 15,000 Repairs and maintenance 30,000 Total variable overhead costs $135,000 Fixed overhead costs Depreciation-Building Depreciation-Machinery Taxes and insurance 23,000 70,000 17,000 199,000 Supervision Total fixed overhead costs 309,000 $444,000 Total overhead costs The company incurred the following actual costs when it operated at 75% of capacity in October. $ 285,200 275,100 Direct materials (46,000 Ibs. a $6.20 per lb.) Direct labor (21,000 hrs. $13.10 per hr. Overhead costs Indirect materials Indirect labor Power $ 41,700 176,900 17,250 34,500 23,000 94,500 15,300 199,000 Repairs and maintenance Depreciation-Building Depreciation Machinery Taxes and insurance Supervision 602,150 Total costs $1,162,450 4. Compute the direct labor cost variance, including its rate and efficiency variances. (Indicate the effect of each variance by selecting for favo rable, unfavorable, and No variance. Round "Rate per hour" answers to two decimal places.) Standard Cost Actual Cost

Answer 1

AH 21000 Actual Cost X X 275100 AR 13.10 AH 21000 X | 2730001 SRL 13.00 Standard Cost SH X 24000 X 312000 SR 13.00 2100 39000 Direct Labor Rate Varaince 2100 Unfavorable Direct Labor Efficiency Variance 39000 Favorable Total Direct Labor Variance 36900 Favorable Factory Capacity =20,000 Units 75% Capacity = 20,000*75% StandardHours= SH For 1 Units * Total Prodcued = (15000*1.60) 15000 45000