Question

HOW DO I CALCULATE?

Antuan Company set the following standard costs for one unit of its product. Direct materials (3.0 Ibs. @ $6.00 per Ib.) Direct labor (1.6 hrs. @ $13.00 per hr.) Overhead (1.6 hrs. @ $18.50 per hr.) Total standard cost $18.00 20.80 29.60 $68.40 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 (758 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 23,000 Depreciation-Machinery 70,000 Taxes and insurance 17,000 Supervision 199,000 Total fixed overhead costs Total overhead costs $135,000 309,000 $444,000 The company incurred the following actual costs when it operated at 75% of capacity in October. $ 285,200 275, 100 Direct materials (46,000 Ibs. @ $6.20 per lb.) Direct labor (21,000 hrs. @ $13.10 per hr.) Overhead costs Indirect materials Indirect labor Power Repairs and maintenance Depreciation-Building Depreciation Machinery Taxes and insurance Supervision Total costs $ 41,700 176,900 17,250 34,500 23,000 94,500 15,300 199,000 602, 150 $1,162,450 3. Compute the direct materials cost variance, including its price and quantity variances. (Indicate the effect of each variance by selecting for favorable, unfavorable, and No variance.) Actual Cost Standard Cost

Answer 1

Direct Material Cost, Price and Quantity Variance AQ 46000 ТАР SP Actual Cost X X 285200 Standard Cost SQ X 45000 X 270000 AQL XL SP 46000 X 6.00 276000 6.20 9200 6000 Direct Material Price Varaince 9200 Unfavorable Direct Material Quantity Varaince 6000 Unfavorable Total Direct Material Varaince 15200 Unfavorable Factory Capacity =20,000 Units 75% Capacity = 20,000*75% Standard Quantity = SQ For 1 Units * Total Prodcued = (15000*3) 15000 45000