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 (3.0 Ibs. @ $5.00 per Ib.) Direct labor (1.9 hrs. @ $11.00 per hr.) Overhead (1.9 hrs. @ $18.50 per hr.) Total standard cost $15.00 20.90 35.15 $71.05 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 maintenance 30,000 Total variable overhead costs Fixed overhead costs Depreciation-Building 24,000 Depreciation Machinery 72,000 Taxes and insurance 16,000 Supervision 280,250 Total fixed overhead costs Total overhead costs $135,000 392,250 $527,250

Answer 1

3
Actual Cost								Standard Cost
Actual Quantity	x	Actual price		Actual Quantity	x	Standard Price		Standard Quantity	x	Standard Price
46,000	x	5.20		46,000	x	$5.00		45,000	x	$5.00
	239200				230000				225000
			9200				5000
Direct materials price variance				9200	Unfavorable
Direct materials quantity variance				5000	Unfavorable
Total direct materials variance				14200	Unfavorable
4
Actual Cost								Standard Cost
Actual hours	x	Actual rate		Actual hours	x	Standard rate		Standard hours	x	Standard rate
23,000	x	$11.20		23,000	x	$11.00		28,500	x	$11.00
	257600				253000				313500
			4600				60500
Direct labor rate variance				4600	Unfavorable
Direct labor efficiency variance				60500	Favorable
Total direct labor variance				55900	Favorable

5
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	41,900	26,900	Unfavorable
Indirect labor	75,000	176,100	101,100	Unfavorable
Power	15,000	17,250	2,250	Unfavorable
Repairs and maintenance	30,000	34,500	4,500	Unfavorable
Total variable costs	135000	269750	134,750	Unfavorable
Fixed costs
Depreciation—Building	24,000	24,000	0	No variance
Depreciation—Machinery	72,000	97,200	25,200	Unfavorable
Taxes and insurance	16,000	14,400	1,600	Favorable
Supervision	280,250	280,250	0	No variance
Total fixed costs	392250	415850	23,600	Unfavorable
Total overhead costs	527250	685600	158,350	Unfavorable