Antuan Company set the following standard costs for one unit of its product. Dir
ID: 2456659 • Letter: A
Question
Antuan Company set the following standard costs for one unit of its product. Direct materials (6 lbs. $5 per lb.) Direct labor (2 hrs. @ $17 per hr) Overhead (2 hrs. @ $18.50 per hr) $ 30 34 37 Total standard cost $ 101 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% level. Overhead Budget (75% Capacity) Variable overhead costs Indirect materials Indirect labor Power Repairs and maintenance 45,000 180,000 45,000 90,000 Total variable overhead costs $360,000 Fixed overhead costs Depreciation-building Depreciation-machinery Taxes and insurance Supervision 24,000 80,000 12,000 79,000 Total fixed overhead costs 195,000 Total overhead costs $555,000Explanation / Answer
Flexible budget
(3) Actual cost Standard cost
AQ * AR AQ * SR SQ * SR
91,000*$5.10 91,000*5 90,000* $5
$464,100 $455,000 $450,000
Material price variance 9100(U)
Material quantiry varaince 5000(U)
total material cost variance 14,100(U)
(4) Direct labor cost variance
AH * AR AH * SR SH * SR
30,500*17.25 30,500 * 17 30,000*17
$526,125 $518,500 $510,000
Direct price variane $7625(U)
Direct labor efficiency variance $8500(U)
Direct labor total vairance $16,125(U)
Variable cost per unit total fixed cost 65% capacity 75% capacity 85% cpaacity Sales( in units) 13,000 15,000 17,000 variable costs indirect materials 2.25 29,250 33,750 38,250 indirect labor 9.00 117,000 135,000 153,000 power 2.25 29,250 33.750 38,250 Repairs & maintenance 4.50 58,500 67,500 76,500 total vaiable cos t 18.00 234,000 270,000 306,000 fixed costs Depreciation - buidling 24,000 24,000 24,000 24,000 Depreciation - machinery 80,000 80,000 80,000 80,000 Taxes & insurance 12,000 12,000 12,000 12,000 Supervision 79,000 79,000 79,000 79,000 total fixed costs 195,000 195,000 195,000 195,000 total oveheac sots 429,000 465,000 501,000