Question

Required information The following information applies to the questions displayed below) Antuan Company set the following standard costs for one unit of its product ve Direct materials (6 Ibs. $5 per Ib.) Direct labor (2 hrs. $17 per hr.) Overhead (2 hrs. $18.50 per hr.) Total standard cost 34 37 The predetermined overhead rate (518 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 lovel Overhead Budget (75% Capacity) Variable overhead costs Indirect materials $ 45,000 Indirect labor 180,000 Power 45,000 Repairs and maintenance 90,000 Total variable overhead costs $360,000 Fixed overhead costs Depreciation-Building 24,000 Depreciation Machinery 80,000 Taxes and insurance 12,000 Supervision 79.809 Total fixed overhead costs 195,000 Total overhead costs $555, eee

Answer 1

ANTUAN COMPANY
Overhead Variance (Report)
For Month Ended October 31
Expected production volume	75% of the capacity
Production level achieved	75% of the capacity
Volume variance	No variance
	Flexible Budget	Actual Results	Variances	Fav./Unfav.
Variable costs:
Indirect materials	$45000	$44250	(45000-44250)= 750	Favorable
Indirect labor	180000	177750	(180000-177750)= 2250	Favorable
Power	45000	43000	(45000-43000)= 2000	Favorable
Repairs and maintenance	90000	96000	(90000-96000)= 6000	Unfavorable
Total variable costs	$360000	$361000	1000	Unfavorable
Fixed costs:
Depreciation- Building	24000	24000	0	NONE
Depreciation- Machinery	80000	75000	(80000-75000)= 5000	Favorable
Taxes and insurance	12000	11500	(12000-11500)= 500	Favorable
Supervision	79000	89000	(79000-89000)= 10000	Unfavorable
Total fixed costs	$195000	$199500	4500	Unfavorable
Total overhead costs	$555000	$560500	5500	Unfavorable

Volume variance is the difference between the budgeted quantity expected to be sold and actual quantity sold. In this case, there is no volume variance as the budgeted quantity expected to be sold and actual quantity both are 75% of the capacity.