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 (4.0 Ibs. ? $6.00 per Ib.) Direct labor (1.7 hrs. $13.00 per hr.) Overhead (1.7 hrs. * $18.50 per 31.45 $24.00 22.10 Total standard cost $77.55 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 15,000 75,000 15,000 30,000 $135, 000 Fixed overheadcosts Depreciation- Building Depreciation- Machinery Taxes and insurance 17,000 Supervision Total fixed overhead costs 25,000 71,000 223,750 336,750 Total overhead costs $471,750 The company incurred the following actual costs when it operated at 75% of capacity in October Direct materials (61,000 Ibs. 6 $6.10 per lb.) Direct labor (21,000 hrs. $13.30 per hr.) Overhead costs $ 372,100 279,300 Indirect materials Indirect labor Power Repairs and maintenance Depreciation-Building Depreciation-Machinery Taxes and insurance Supervision $ 41,600 176,650 17,250 34,500 25,000 95, 850 15,300 223,750 629,900 $1,281,300 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) 13,000 15,000 17,000 Variable costs Indirect materials 1 13,000 15,000 17,000 Indirect labor 5 65,000 75,000 85,000 Power 1 13,000 15,000 17,000 Repairs and maintenance 2 26,000 30,000 34,000 Total variable costs 9 117,000 135,000 153,000 Fixed costs Depreciation—Building 25000 25000 25000 25000 Depreciation—Machinery 71,000 71,000 71,000 71,000 Taxes and insurance 17,000 17,000 17,000 17,000 Supervision 223,750 223,750 223,750 223,750 Total fixed costs 336750 336750 336750 336750 Total overhead costs $453,750 $471,750 $489,750

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