Question

Antuan Company set the following standard costs for one unit of its product. Direct materials (4.Ibs. @ $4.00 per Ib.) Direct labor (1.8 hrs. @ $12.00 per hr.) Overhead (1.8 hrs. $18.50 per hr.) Total standard cost $16.00 21.60 33.30 $79.98 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,eee Indirect labor 90, eee Power 15,808 Repairs and maintenance 30, eee Total variable overhead costs $150,890 Fixed overhead costs Depreciation-Building 24, eee Depreciation Machinery 71, eee Taxes and insurance 18,800 Supervision 236,500 Total fixed overhead costs 349,500 Total overhead costs $499,500 The company incurred the following actual costs when it operated at 75% of capacity in October $ 256, 203 282,900 Direct materials (61,980 Ibs. $4.20 per lb.) Direct labor (23, we hrs. @ $12.30 per hr.) Overhead costs Indirect materials Indirect labor Power Repairs and maintenance Depreciation-Building Depreciation-Machinery Taxes and insurance Supervision Total costs $ 41,850 176,750 17,250 34,50€ 24,690 95,850 16, 200 236,500 642,988 $1,182,888 epare a detailed overhead variance report that shows the variances for individual items of overhead. Expected production volume Production level achieved Volume variance ANTUAN COMPANY Overhead Variance Report For Month Ended October 31 75% of capacity 75% of capacity No variance Flexible Budget Actual Results Variances Fav. / Unfav. Variable costs Indirect labori Power Repairs and maintenance Total variable costs Fixed costs Depreciation Building Depreciation Machinery Taxes and insurance Supervision

Answer 1

ANTUAN COMPANY
Overhead Variance Report
For Month Ended October 31
Expected production volume	75% of capacity
Production level achieved	75% of capacity
Volume variance	No variance
	Flexible Budget	Actual Results	Variances	Fav. / Unfav.
Variable costs
Indirect materials	15,000	41,850	26,850	Unfavorable
Indirect labor	90,000	176,750	86,750	Unfavorable
Power	15,000	17,250	2,250	Unfavorable
Repairs and maintenance	30,000	34,500	4,500	Unfavorable
Total variable costs	150000	270350	120,350	Unfavorable
Fixed costs
Depreciation—Building	24,000	24,000	0	No variance
Depreciation—Machinery	71,000	95,850	24,850	Unfavorable
Taxes and insurance	18,000	16,200	1,800	Favorable
Supervision	236,500	236,500	0	No variance
Total fixed costs	349500	372550	23,050	Unfavorable
Total overhead costs	499500	642900	143,400	Unfavorable