Question

Antuan Company set the following standard costs for one unit of its product. one unter Direct materials (3.0 Ibs. $5.00 per tb.) Direct labor (1.6 hrs. $11.00 per hr.) Overhead (1.6 hrs. e $18.50 per hr.) Total standard cost . ............. $15.00 17.60 29.60 $62.20 $62.20 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 overhead costs Indirect materials $ 15,000 Indirect labor 75,000 Power 15,000 Repairs and maintenance 30,000 Total variable overhead costs Pixed overhead costs Depreciation Building 24,000 Depreciation Machinery 71.000 Taxes and insurance 7.000 Supervision 7,000 Total fixed overhead costs Total overhead costs 309.000 14,000

Answer 1

Solution 1 & 2:

Antuan company
Flexible Overhead Budget
For month ended Oct 31
Particulars	Flexible Budget		Flexible Budget for
	Variable amount per unit	Total fixed cost	65% of capacity	75% of capacity	85% of capacity
Sales (In units)			13000	15000	17000
Variable overhead costs:
Indirect materials	$1.00		$13,000.00	$15,000.00	$17,000.00
Indirect labor	$5.00		$65,000.00	$75,000.00	$85,000.00
Power	$1.00		$13,000.00	$15,000.00	$17,000.00
Repairs and maintenance	$2.00		$26,000.00	$30,000.00	$34,000.00
Total variable costs	$9.00		$117,000.00	$135,000.00	$153,000.00
Fixed overhead costs:
Depreciation - Building		$24,000.00	$24,000.00	$24,000.00	$24,000.00
Depreciation - Machinery		$71,000.00	$71,000.00	$71,000.00	$71,000.00
Taxes and Insurance		$17,000.00	$17,000.00	$17,000.00	$17,000.00
Supervision		$197,000.00	$197,000.00	$197,000.00	$197,000.00
Total fixed costs		$309,000.00	$309,000.00	$309,000.00	$309,000.00
Total overhead costs			$426,000.00	$444,000.00	$462,000.00