Antuan Company set the following standard costs for one unit of its product. Dir

Q: Antuan Company set the following standard costs for one unit of its product. Dir

Labour Cost Variance =Standard Cost-Actual cost =331500-279300 =52200Favourable Note- Standard Cost is calculates as follows 1.7 hours per unit. Units produced=15000 Therefore, standard hours for actual output=1.7*15000=25500 hours Standard cost= 25500*13=331500 Labour Rate Variance =(SR-AR)*AH =(13-13.3)*21000 =6300 unfavourable Labour efficiency variance =(SH for actual output-Actual hours)*Standard Rate =(25500-21000)*13 =58500 favourable

ID: 2534609 • Letter: A

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

Labour Cost Variance

=Standard Cost-Actual cost

=331500-279300

=52200Favourable

Note- Standard Cost is calculates as follows

1.7 hours per unit. Units produced=15000

Therefore, standard hours for actual output=1.7*15000=25500 hours

Standard cost= 25500*13=331500

Labour Rate Variance

=(SR-AR)*AH

=(13-13.3)*21000

=6300 unfavourable

Labour efficiency variance

=(SH for actual output-Actual hours)*Standard Rate

=(25500-21000)*13

=58500 favourable

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Antuan Company set the following standard costs for one unit of its product. Dir

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Antuan Company set the following standard costs for one unit of its product. Dir

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