Question

Required information Part 2 of 4 Problem 21-3A Flexible budget preparation; computation of materials, labor, and overhead variances; and overhead variance report LO P1, P2, P3, C2 The following information applies to the questions displayed below 3 points Antuan Company set the following standard costs for one unit of its product Direct materials (4.0 Ibs. $6.00 per 1b.) Direct labor (1.7 hrs. S12.00 per hr.) Overhead (1.7 hrs. $18.5e per hr.) $24.00 20.48 eBook 31.45 Total standard cost $75.85 Print 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. References Overhead Budget (5% Capacity) Variable overhead costs Indirect materials Indirect labor 15,000 75,000 Power 15,000 30,000 Repairs and maintenance Total variable overhead costs Fixed overhead costs Depreciation Building Depreciation-Hachinery Taxes and insurance Supervision Tetal fixed overhead costs $135,000 24,000 71,000 18,000 223,750 336,750 $473,750 Total overhead costs The company incurred the following actual costs when it operated at 75 % of capacity in October Direct materials (61,000 Ibs. s6.20 per 1b.) Direct labor (20,000 hrs. e $12.30 per he.) Overhead costs Indirect saterials Indirect labor $ 378,200 246,000 S 41,300 176,600 17,250 34,500 24,000 Pouer Repairs and mintenance Depreciation-Building Depreciation-Pachinery Taxes and insurance 95,850 16,200 223,750 Supervision 629,450 $1,253,650 Total costs Problem 21-3A Part 3 3. Compute the direct matenials cost varnance, including as price and quantity variances AQ Actual Quantity SQ Standard Quantity AP Actual Price SP Standard Price Standard Cost Actual Cost 0 $

Answer 1

Direct material Price variance = (Standard Price – Actual Price)*Actual quantity purchased

= (6-6.20)*61,000

= $12,200 Unfavorable

Direct material Quantity Variance = (Standard Quantity – Actual Quantity)*Standard Price

= (4*15,000-61,000)*6

= $6,000 Unfavorable

Direct material cost variance = 12,200+6000

= $18,200 Unfavorable

Actual Cost				Standard Cost
Quantity	Price	Cost		Quantity	Price	Cost
61,000	6.20	378,200		60,000	6	360,000