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 (4.8 Ibs. $5.80 per Ib.) Direct labor (1.7 hrs. $13.80 per hr.) Overhead (1.7 hrs. $18.50 per hr.) Total standard cost $28.8e 22.18 31.45 $73.55 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 Variable overhead costs $15,809 Indirect materials Indirect labor Power Repairs and maintenance Total variable overhead costs 75,88e 15,880 38,88 $135,809 Fixed overhead costs Depreciation-Building Depreciation-Machinery Taxes and insurance Supervision Total fixed overhead costs 25,880 72,88e 16,880 223,75e 336,758 $471,75e Total overhead costs

Explanation / Answer

Actual Cost 12100 2500 Standard Cost AQ x AP AQ x SP SQ x SP 60,500 x $5.20 60,500 x $5.00 60,000 x $5.00 $314,600.00 $302,500.00 $300,000.00 $12,100.00 14600 2500 Direct materials price variance 12100 Unfavorable Direct materials quantity variance 2500 Favorable Total direct materials variance $9,600 Unfavorable SQ=20000*75%*4=60000

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