ine tollowing intormation applies to tne questions aisplayea below Antuan Compan

Question

ine tollowing intormation applies to tne questions aisplayea below Antuan Company set the following standard costs for one unit of its product. Direct materials (3.0 Ibs. $4.60 per Ib.) Direct labor (2.0 hrs. $14.80 per hr.) Overhead (2.0 hrs. $18.50 per hr.) Total standard cost $12.80 28.00 37.00 $77.00 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. Variable overhead costs ok Indirect materials Indirect Labor Power Repairs and maintenance Total variable overhead costs s 15,000 75,000 15,009 30.000 $135,00e Fixed overhead costs 23,800 71,800 18,000 e8,800 Depreciation-Building Depreciation-Hachinery Taxes and insurance Supervision Total fixed overhead costs 420,000 Total overhead costs $555,00e The company incurred the following actual costs when it operated at 75% of capacity in October Direct materials (46,000 lbs. @ $4.10 per ?b.) Direct labor (20,000 hrs. $14.40 per hr.) Overhead costs s 188,600 288,000 Indirect materials Indirect labor Power Repairs and maintenance Depreciation-Bullding Depreclation-lachinery 41,100 176,300 17,250 34,500 23,000 95,850 16,200 Taxes and insurance Supervision 309 000 712 200 1.188,800 Total costs

Explanation / Answer

ANTUAN COMPANY Flexible Overhead Budgets For Month Ended October 31 Flexible Budget Flexible Budget for Variable Amount per Unit Total Fixed Cost 65% of capacity 75% of capacity 85% of capacity Sales (in units) 20000*.65,.75,.85 13,000 15,000 17,000 Variable costs Indirect materials 15000/15000 $1.00 13,000 15,000 17,000 Indirect labor 75000/15000 $5.00 65,000 75,000 85,000 Power 15000/15000 $1.00 13,000 15,000 17,000 Repairs and maintenance 30000/15000 $2.00 26,000 30,000 34,000 Total variable costs 9 117,000 135000 153000 Fixed costs Depreciation—Building $23,000 $23,000 $23,000 $23,000 Depreciation—Machinery 71,000 71,000 71,000 71,000 Taxes and insurance 18,000 18,000 18,000 18,000 Supervision 308,000 308,000 308,000 308,000 Total fixed costs 420000 420000 420000 420000 Total overhead costs $537,000 $555,000 $573,000

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