Required information [The following information applies to the questions display

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.

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.

15,000

The company incurred the following actual costs when it operated at 75% of capacity in October.

Direct materials (3.0 Ibs. @ $6.00 per Ib.) $ 18.00 Direct labor (1.9 hrs. @ $12.00 per hr.) 22.80 Overhead (1.9 hrs. @ $18.50 per hr.) 35.15 Total standard cost $ 75.95 Required 182. Prepare flexible overhead budgets for October showing the amounts of each variable and fixed cost at the 65%, 75%, and 85% capacity levels and classify all items listed in the fixed budget as variable or fixed ANTUAN COMPANY Flexible Overhead Budgets For Month Ended October 31 Flexible Budget Flexible Budget for 75% of capacity Variable Amount Total Fixed Cost 65% of capaci 85% of capacity r Unit Sales (in units) 13,000 15,000 17,000 Variable overhead costs Indirect materials Indirect labor Power Repairs and maintenance 1.00 5.00 1.00 2.00 13,000 65,000 13,000 26,000 15,000 75,000 15,000 30,000 17,000 85,000 17,000 34,000 otal variable costs 9.00 117,000 135,000 153,000 Fixed overhead costs Depreciation-Building Depreciation-Machinery Taxes and insurance Supervision 24,000 70,000 17,000 281,250 24,000 70,000 17,000 281,250 24,000 70,000 17,000 281,250 24,000 70,000 17,000 281,250 otal fixed costs 392,250 392,250 392,250 392,250 Total overhead costs $ 509,250$ 527,250$ 545,250

Explanation / Answer

Answer 1 & 2. ANTUAN COMPANY Flexible Overhead Budgets For Month Ended October 31 Flexible Budget Flexible Budget for Variable Amt. Per Unit Total Fixed Costs 65% of Capacity 75% of Capacity 85% of Capacity Sales In Unilts          13,000.00          15,000.00          17,000.00 Variable Costs Indirect Materials                     1.00          13,000.00          15,000.00          17,000.00 Indirect Labor                     5.00          65,000.00          75,000.00          85,000.00 Power                     1.00          13,000.00          15,000.00          17,000.00 Repair & Maintenenace                     2.00          26,000.00          30,000.00          34,000.00 Total Variable Overhead Costs                     9.00        117,000.00        135,000.00        153,000.00 Fixed Overhead Costs Depreciation - Building          24,000.00          24,000.00          24,000.00          24,000.00 Depreciation - Machinery          94,500.00          70,000.00          70,000.00          70,000.00 Taxes & Insurance          15,300.00          17,000.00          17,000.00          17,000.00 Supervision        281,250.00        281,250.00        281,250.00        281,250.00 Total Fixed Overhead Costs                          -          415,050.00        392,250.00        392,250.00        392,250.00 Total Overhead Costs        509,250.00        527,250.00        545,250.00 Answer 3. Material Actual Cost Standard Cost AQ X AP AQ X SP SQ X SP          45,500 X           6.20          45,500 X           6.00          45,000 X           6.00          282,100          273,000          270,000          9,100          3,000 Direct Material Price Variance          9,100 (U) Direct Material Quantity Variance          3,000 (U) Total Direct Material Variance        12,100 (U) Answer 4. Labor Actual Cost Standard Cost AH X AP AH X SP SH X SP          22,000 X         12.30          22,000 X               12          28,500 X               12          270,600          264,000          342,000          6,600        78,000 Direct Labor Rate Variance          6,600 (U) Direct Labor Efficiency Variance        78,000 (F) Total Direct Labor Variance        71,400 (F) Answer 5. ANTUAN COMPANY Overhead Variance Report For Month Ended October 31 Expected Production Volume          15,000.00 Production Level achieved          15,000.00 Volume Variance                          -   Flexible Budget Actual results Variances Fav. / Unfav. Variable Costs Indirect Materials          15,000.00          41,200.00          26,200.00 Unfav. Indirect Labor          75,000.00        176,150.00        101,150.00 Unfav. Power          15,000.00          17,250.00             2,250.00 Unfav. Repair & Maintenenace          30,000.00          34,500.00             4,500.00 Unfav. Total Variable Overhead Costs        135,000.00        269,100.00        134,100.00 Unfav. Fixed Overhead Costs Depreciation - Building          24,000.00          24,000.00                          -   Depreciation - Machinery          70,000.00          94,500.00          24,500.00 Unfav. Taxes & Insurance          17,000.00          15,300.00             1,700.00 Fav. Supervision        281,250.00        281,250.00                          -   Unfav. Total Fixed Overhead Costs        392,250.00        415,050.00          22,800.00 Unfav. Total Overhead Costs        527,250.00        684,150.00        156,900.00 Unfav.

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