Question

Need help with the following accounting problem.

Problem 23-3A 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.] Antuan Company set the following standard costs for one unit of its product. Direct materials (4.0 Ibs. @ $5.00 per Ib.) Direct labor (1.9 hrs. @ $12.00 per hr.) Overhead (1.9 hrs. @ $18.50 per hr.) Total standard cost $20.00 22.80 35.15 $77.95 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 45,000 Total variable overhead costs Fixed overhead costs Depreciation-Building 24,000 Depreciation-Machinery 71,000 Taxes and insurance 16,000 Supervision 266,250 Total fixed overhead costs Total overhead costs $150,000 377,250 $527,250

Answer 1

1&2				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			3		39000	45000	51000
	total variable costs					130000	150000	170000
	Fixed costs
	Depreciation-Building				24,000	24,000	24,000	24,000
	Depreciation-Machinery				71,000	71,000	71,000	71,000
	Taxes and insurance				16,000	16,000	16,000	16,000
	Supervision				266,250	266,250	266,250	266,250
	total fixed costs				377,250	377,250	377,250	377,250
	total overhead costs					507,250	527,250	547,250
	Actual cost								Standard cost
	AQ	*	AP		AQ	*	SR		SQ	*	SR
	61000	*	5.1		61000	*	5		60000	*	5
		311,100				305000				300000
				6,100				5000
	direct materials price variance				6,100	U
	direct materials quantity variance				5,000	U
	total direct materials variance				11,100	U

Actual cost								Standard cost
AH	*	AR		AH	*	SR		SH	*	SR
19000	*	12.2		19000	*	12		28500	*	12
	231,800				228000				342000
			3,800				114000
Direct labor rate variance				3,800	U
Direct labor Efficiency variance				114,000	F
total direct labor variance				110,200	F