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 (3.0 Ibs.$5.00 per Ib.) Direct labor (1.8 hrs. $13.00 per hr.) Overhead (1.8 hrs.@$18.50 per hr.) Total standard cost $15.00 23.40 33.30 $71.70 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 71,000 17,000 251,500 364,500 $499,500 Total overhead costs

Explanation / Answer

Flexible Budget Variable Total Fixed 65% 75% 85% Amt per unit cost Sales in units 13000 15000 17000 Variable OH cost Indirect labor 5 65000 75000 85000 Indirect Material 1 13000 15000 17000 Power 1 13000 15000 17000 Repairs and Maintenance 2 26000 30000 34000 Total Variable cost 9 117000 135000 153000 Fixed Overheads cost Depreciation-Building 25000 25000 25000 25000 Depreciation-Machinery 71000 71000 71000 71000 Taxes and insurance 17000 17000 17000 17000 Supervision 251500 251500 251500 251500 Total fixed cost 364500 364500 364500 364500 Total Overheads 481500 499500 517500

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