The following Information applies to the questions displayed below Antuan Compen
ID: 2463805 • Letter: T
Question
The following Information applies to the questions displayed below Antuan Compeny set the following standard costs for one unit of its product Direct labor (1.9 hrs. $13.0 per hr.) Overhead (1.9 hrs. @18.50 per hr.) 30.00 24.70 35.15 Total standard cost $89.85 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. mlovethead Budget (75% Capacity Variable overhead costs Indirect materials Indirect labor Power Repairs and maintenance $ 15,000 90,000 15,000 30,000 Total variable overhead costs $ 150,000 Fixed overhead costs 24,000 3,000 18,000 262,250 Taxes and insurance Total fixed overhead costs 377,250 Total overhead costs $527.250 The company incurred the following actual costs when it operated at 75% of capacity in October Direct materials (76,000 lbs o $6 10 pet Ib) Direct materials (76.000 lbs a $6.10 per lb) Direct labor (31,000 hrs.$13.10 per hr.) Overhead costs $ 463,600 406,100 Indirect materials Indirect labor Power S 46,000 177 250 17,250 SAMSExplanation / Answer
Answer:
Flexible Budget Preparation Direct Material (5.0lbs *$6 *20,000) 600,000 Direct Labor (1.9hrs *$13 *20,000) 494,000 Overhead Costs Variable Costs Indirect material 15,000 Indirect labor 90,000 Power 15,000 Repair and Manitenance 30,000 Total variable costs 150,000 Fixed Costs Depreciation- building 24,000 Depreciation- machinery 73,000 Taxes and insurance 18,000 Supervision 262,250 Total fixed costs 377,250 Total Costs 1,621,250