Antuan Company set the following standard costs for one unit of its product. Dir

Question

Antuan Company set the following standard costs for one unit of its product. Direct materials (4.8 Ibs.$5.00 per Ib.) Direct labor (1.7 hrs. $13.00 per hr.) Overhead (1.7 hrs. $18.50 per hr.) Total standard cost $20.00 22.10 31.45 $73.55 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 Indirect labor Power Repairs and maintenance Total variable overhead costs $ 15,000 75,000 15,000 30,000 $135,000 Fixed overhead costs Depreciation-Building Depreciation-Machinery Taxes and insurance Supervision Total fixed overhead costs 25,000 72,000 16,000 223,750 336,750 $471,750 Total overhead costs The company incurred the following actual costs when it operated at 75% of capacity in October Direct materials (60,500 Ibs. $5.20 per lb. Direct labor (28,000 hrs. $13.30 per hr.) Overhead costs $ 314,600 372,400 Indirect materials Indirect labor Power Repairs and maintenance Depreciation-Building Depreciation-Machinery Taxes and insurance Supervision $ 41,300 176,450 17,250 34,500 25,000 97,200 14,400 223,750 629,850 $1,316,850 Total costs

Explanation / Answer

Antuan Company Overhead Variance Report Expected production volume 75% of capacity production level achieved 75% of capacity Volume variance No variance Flexible Actual Variances Fav/unfav budget results Variable Costs Indirect materials 15,000 41,300 26,300 U Indirect labor 75,000 176,450 101,450 U Power 15,000 17,250 2,250 U Repairs & Maintenance 30,000 34,500 4,500 U total variable costs 135,000 269,500 134,500 U Fixed costs Depreciation-Building 25,000 25,000 0 N Depreciation-Machinery 72,000 97,200 25,200 U Taxes and insurance 16,000 14,400 1,600 F Supervision 223,750 223,750 0 N total fixed costs 336,750 360,350 23,600 U total overhead costs 471,750 629,850 158,100 U

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