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

Question

Antuan Company set the following standard costs for one unit of its product Direct materials (5.0 lbs.@$6.00 per lb.) 30.00 Direct labor (1.7 hrs. $13.00 per hr) Overhead 1.7 hrs. $18.50 per hr.) 22.10 31.45 Total standard cost $ 83.55 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 5 15,000 75,000 15,000 30,000 $135,000 Fixed overhead costs 24,000 71,000 16,000 225,750 Taxes and insurance Total fixed overhead costs 336,750 Total overhead costs $ 471,750

Explanation / Answer

Antuan Company Standard cost Direct material $              30.00 Direct Labor $              22.10 Overhead $              31.45 Total Standard Cost $              83.55 Flexible Budget Capacity Level 65% 75% 85% Units sold 13000 15000 17000 Indirct Material $      13,000.00 $     15,000.00 $      17,000.00 Indirect Labor $      65,000.00 $     75,000.00 $      85,000.00 Power $      13,000.00 $     15,000.00 $      17,000.00 Repairs & Maintenance $      26,000.00 $     30,000.00 $      34,000.00 Total Variable cost $    117,000.00 $   135,000.00 $    153,000.00 Fixed Overhead Cost Depreciation -Building $      24,000.00 $     24,000.00 $      24,000.00 Depreciation -Machinery $      71,000.00 $     71,000.00 $      71,000.00 Taxes & Insurance $      16,000.00 $     16,000.00 $      16,000.00 Supervsion $    225,750.00 $   225,750.00 $    225,750.00 Total fixed overhead Cost $    336,750.00 $   336,750.00 $    336,750.00 Total Cost $    453,750.00 $   471,750.00 $    489,750.00 Units sold 65% Capacity=20000*65% 75% Capacity=20000*75% 85% Capacity=20000*85% Direct Material Price Variance= AQ(AP-SP) AQ= 76000 AP= $                 6.10 SP= $                 6.00 Direct Material Price Variance $        7,600.00 (U) Direct Mateial Quantity Variance=SP(AQ-SQ) AQ= 76000 SQ=($5*15000) 75000 SP= $                 6.00 Direct Mateial Quantity Variance= $        6,000.00 (F) Direct Material Cost Variance=DMP Variance+DMQ Variance $        1,600.00 (U) Direct Labor rate Variance=AH(AR-SR) AH= 24000 AR= $              13.30 SR= $              13.00 Direct Labor rate Variance= $        7,200.00 (U) Direct Labor Efficiency Variance=SR(AH-SH) AH= 24000 SH=(1.7*15000) 25500 SR= $              13.00 Direct Labor Efficiency Variance= $    (19,500.00) (F) Direct Labor cost Variance= $    (12,300.00) (F) Antuan Company Flexible Budget Report Budget (75% Capacity) Actual(75% Capacity) Variance Indirct Material $      15,000.00 $     41,500.00 $    (26,500.00) (U) Indirect Labor $      75,000.00 $   176,450.00 $ (101,450.00) (U) Power $      15,000.00 $     17,250.00 $      (2,250.00) (U) Repairs & Maintenance $      30,000.00 $     34,500.00 $      (4,500.00) (U) Total Variable cost $    135,000.00 $   269,700.00 $ (134,700.00) (U) Fixed Overhead Cost Depreciation -Building $      24,000.00 $     24,000.00 $                     -   Depreciation -Machinery $      71,000.00 $     95,850.00 $    (24,850.00) (U) Taxes & Insurance $      16,000.00 $     14,400.00 $        1,600.00 (F) Supervsion $    225,750.00 $   225,750.00 $                     -   Total fixed overhead Cost $    336,750.00 $   360,000.00 $    (23,250.00) (U) Total Cost $    471,750.00 $   629,700.00 $ (157,950.00) (U)

Related Questions

Navigate

• Browse (All)
• Browse A
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.