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. Direct materials (4.0 Ibs. @ $6.00 per Ib.) Direct labor (1.9 hrs. @ $14.000 per hr.) Overhead (1.9 hrs. @ $18.50 per 251 hr.) Total standard cost $85.75 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 $ 15,000 Indirect labor 75,000 Power 15,000 Repairs and 30,000 maintenance Total variable $135,000 overhead costs Fixed overhead costs Depreciation, 24,000 Building Depreciation, 72,000 Machinery Taxes and insurance 18,000 Supervision 278, 250 Total fixed overhead 392,250 costs Total overhead costs $527,250

Questions

Answer 1

			Flexible overhead Budget
			For the month oct 31
			Flexible budget		Flexible Budget for
			Variable	total	65% of	75% of	85% of
			amt pu	fixed cost	capacity	capacity	capacity
Sales in (units)					13000	15000	17000
Variable Costs
Indirect materials			1		13000	15000	17000
Indirect labor			5		65000	75000	85000
Power			1		13000	15000	17000
Repairs & Maintenance			2		26000	30000	34000
total variable costs					117000	135000	153000
Fixed costs
Depreciation-Building				24,000	24,000	24,000	24,000
Depreciation-Machinery				72,000	72,000	72,000	72,000
Taxes and insurance				18,000	18,000	18,000	18,000
Supervision				278,250	278,250	278,250	278,250
total fixed costs				392,250	392,250	392,250	392,250
total overhead costs					509,250	527,250	545,250

Actual cost								Standard cost
AQ	*	AP		AQ	*	SR		SQ	*	SR
60500	*	6.2		60500	*	6		60000	*	6
	375,100				363000				360000
			12,100				3000
direct materials price variance				12,100	U
direct materials quantity variance				3,000	U
total direct materials variance				15,100	U

Actual cost								Standard cost
AH	*	AR		AH	*	SR		SH	*	SR
21000	*	14.3		21000	*	14		28500	*	14
	300,300				294000				399000
			6,300				105000
Direct labor rate variance				6,300	U
Direct labor Efficiency variance				105,000	F
total direct labor variance				98,700	F

		Overhead Variance Report
Expected production volume			75% of capacity
production level achieved			75% of capacity
Volume variance			No variance
			Flexible	Actual	Variances	Fav/unfav
			budget	results
Variable Costs
Indirect materials			15,000	41,350	26,350	U
Indirect labor			75,000	176,650	101,650	U
Power			15,000	17,250	2,250	U
Repairs & Maintenance			30,000	34,500	4,500	U
total variable costs			135,000	269,750	134,750	U
Fixed costs
Depreciation-Building			24,000	24,000	0	N
Depreciation-Machinery			72,000	97,200	25,200	U
Taxes and insurance			18,000	16,200	1,800	F
Supervision			278,250	278,250	0	N
total fixed costs			392,250	415,650	23,400	U
total overhead costs			527,250	685,400	158,150	U