Question

Antuan Company set the following standard costs for one unit of its product. Direct materials (4.0 Ibs. @ $6.00 per Ib.) Direct labor (1.8 hrs. @ $11.00 per hr.) Overhead (1.8 hrs. @ $18.50 per hr.) Total standard cost $24.00 19.80 33.30 $77.10 The predetermined overhead rate ($18.50 per direct labor hour) is based on an expected volume of 75% of the factory capacity of 20,000 units per month. Following are the company's budgeted overhead costs per month at the 75% capa level. Overhead Budget (75% Capacity) Variable overhead costs Indirect materials $ 30,000 Indirect labor 75,000 Power 30,000 Repairs and maintenance 30,000 Total variable overhead costs Fixed overhead costs Depreciation-Building 25,000 Depreciation-Machinery 72,000 Taxes and insurance 18,000 Supervision 219,500 Total fixed overhead costs Total overhead costs $ 165,000 334,500 $499,500

Answer 1

Direct Material Cost, Price and Quantity Variance I X Actual Cost AQL X 61500 X 375150 AP 6.10 AQ 61500 SP 6.00 Standard Cost SQX 60000 X 360000 SP 6.00 X 369000 6150 9000 Direct Material Price Varaince 6150 Unfavorable Direct Material Quantity Varaince 9000 Unfavorable Total Direct Material Varaince 15150 Unfavorable Factory Capacity =20,000 Units 75% Capacity = 20,000*75% Standard Quantity = SQ For 1 Units * Total Prodcued = (15000*4) 15000 60000