Antuan Company set the following standard costs for one unit of its product. Dir
ID: 2511894 • Letter: A
Question
Antuan Company set the following standard costs for one unit of its product. Direct menerials (3 Obs $400 periti Direct labor (19 hrs. D $13.00 per hr $12.00 7183 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 Indrect lebor Repars and mamenanoe variable overhesd costs 135000 72000 8 000 Teses and Ineurence 302 250 Total overheed coss The company incurred the following actual costs when it operated at 75% of capacity in October Direct mana (45 500 I 0 $4.20 per b Direct labor (19000 hrs $133D perhr s 41100 Repairs and maimenance 7200 6200 5 and insusance Supervision Tobal co 129150Explanation / Answer
Solution:
Part 1 & 2
ANTUAN COMPANY
Flexible Overhead Budget
For the Month Ended October 31
Flexible Budget
Flexible Budget for
Variable Amount per unit
Total fixed cost
65% of Capacity
75% of Capacity
85% of Capacity
Sales (in units)
13,000
15,000
17000
Variable overhead costs (Quantity x Variable Cost per Unit)
Indirect materials
$1
($15,000 / 15000 Units at 75% level)
$13,000
$15,000
$17,000
Indirect labor
$5
($75,000 / 15,000 Units)
$65,000
$75,000
$85,000
Power
$1
($15,000 / 15,000 Units)
$13,000
$15,000
$17,000
Repair and maintenance
$2
($30,000 / 15000 Units)
$26,000
$30,000
$34,000
Total variable factory overhead
$117,000
$135,000
$153,000
Fixed Overhead Costs
Depreciation - Building
$23,000
$23,000
$23,000
$23,000
Depreciation - machinery
$72,000
$72,000
$72,000
$72,000
Taxes and insurance
$18,000
$18,000
$18,000
$18,000
Supervision
$279,250
$279,250
$279,250
$279,250
Total Fixed Overhead costs
$392,250
$392,250
$392,250
$392,250
Total Overhead Costs
$509,250
$527,250
$545,250
Part 5 --- Overhead Variance Report
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
Variance
Fav / Unfav.
Variable overhead cost:
Indirect materials
$15,000
$41,100
$26,100
U
Indirect labor
$75,000
$176,850
$101,850
U
Power
$15,000
$17,250
$2,250
U
Repair and maintenance
$30,000
$34,500
$4,500
U
Total variable factory overhead
$135,000
$269,700
$134,700
U
Fixed Overhead Costs
Depreciation - Building
$23,000
$23,000
$0
None
Depreciation - machinery
$72,000
$97,200
$25,200
U
Taxes and insurance
$18,000
$16,200
$1,800
F
Supervision
$279,250
$279,250
$0
None
Total Fixed Overhead costs
$392,250
$415,650
$23,400
U
Total Overhead Costs
$527,250
$685,350
$158,100
U
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ANTUAN COMPANY
Flexible Overhead Budget
For the Month Ended October 31
Flexible Budget
Flexible Budget for
Variable Amount per unit
Total fixed cost
65% of Capacity
75% of Capacity
85% of Capacity
Sales (in units)
13,000
15,000
17000
Variable overhead costs (Quantity x Variable Cost per Unit)
Indirect materials
$1
($15,000 / 15000 Units at 75% level)
$13,000
$15,000
$17,000
Indirect labor
$5
($75,000 / 15,000 Units)
$65,000
$75,000
$85,000
Power
$1
($15,000 / 15,000 Units)
$13,000
$15,000
$17,000
Repair and maintenance
$2
($30,000 / 15000 Units)
$26,000
$30,000
$34,000
Total variable factory overhead
$117,000
$135,000
$153,000
Fixed Overhead Costs
Depreciation - Building
$23,000
$23,000
$23,000
$23,000
Depreciation - machinery
$72,000
$72,000
$72,000
$72,000
Taxes and insurance
$18,000
$18,000
$18,000
$18,000
Supervision
$279,250
$279,250
$279,250
$279,250
Total Fixed Overhead costs
$392,250
$392,250
$392,250
$392,250
Total Overhead Costs
$509,250
$527,250
$545,250
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