Fill This Form To Receive Instant Help
Fill This Form To Receive Instant Help
Homework answers / question archive / Antuan Company set the following standard costs for one unit of its product
Antuan Company set the following standard costs for one unit of its product. Direct materials (4.0 Ibs. @ $6.00 per Ib.) Direct labor (1.8 hrs. @ $12.00 per hr.) Overhead (1.8 hrs. @ $18.50 per hr.) Total standard cost $24.00 21.60 33.30 $ 78.90 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 $ 15,000 Indirect labor 75,000 Power 15,000 Repairs and maintenance 30,000 Total variable overhead costs Fixed overhead costs Depreciation-Building 24,000 Depreciation–Machinery 72,000 Taxes and insurance 17,000 Supervision 251,500 Total fixed overhead costs $135,000 364,500 $499,500 Total overhead costs
The company incurred the following actual costs when it operated at 75% of capacity in October. $ 378, 200 270,600 Direct materials (61,000 Ibs. @ $6.20 per lb.) Direct labor (22,000 hrs. @ $12.30 per hr.) Overhead costs Indirect materials Indirect labor Power Repairs and maintenance Depreciation-Building Depreciation-Machinery Taxes and insurance Supervision Total costs $ 41,350 176,600 17,250 34,500 24,000 97,200 15,300 251,500 657,700 $1,306,500
4. Compute the direct labor cost variance, including its rate and efficiency variances. (Indicate the effect of each variance by selecting for favorable, unfavorable, and No variance. Round "Rate per hour" answers to two decimal places.) Actual Cost Standard Cost
5. Prepare a detailed overhead variance report that shows the variances for individual items of overhead. (Indicate the effect of each variance by selecting for favorable, unfavorable, and No variance.) ANTUAN COMPANY Overhead Variance Report For Month Ended October 31 Expected production volume Production level achieved Volume variance Flexible Budget Actual Results Variances Fav. / Unfav. Variable costs Fixed costs Total overhead costs
| Cost per unit of each variable item | ||||||
| Total Cost | Production | Cost per unit | ||||
| Indirect Material | 15,000.00 | 15,000.00 | 1.00 | |||
| Indirect Labor | 75,000.00 | 15,000.00 | 5.00 | |||
| Power | 15,000.00 | 15,000.00 | 1.00 | |||
| Repairs and Maintenance | 30,000.00 | 15,000.00 | 2.00 | |||
| Total Variable Overhead cost | 1,35,000.00 | 15,000.00 | 9.00 | |||
| 20000 units= | 1.00 | Capacity | ||||
| 20000*75%=15000 units | 0.75 | Capacity | ||||
| Antuan Company | ||||||
| Flexible Budget | ||||||
| For the month ended October 31st | ||||||
| (A) | (B) | Sales Units*(A)+(B) | Sales Units*(A)+(B) | Sales Units*(A)+(B) | ||
| Variable cost per unit | Fixed Cost | 65% Capacity | 75% Capacity | 85% Capacity | ||
| Sales in Units=(15000*65%/75%),(15000*85%/75%) | 13,000.00 | 15,000.00 | 17,000.00 | |||
| Factory Overhead | ||||||
| Variable cost | ||||||
| Indirect Material | 1.00 | 13,000.00 | 15,000.00 | 17,000.00 | ||
| Indirect Labor | 5.00 | 65,000.00 | 75,000.00 | 85,000.00 | ||
| Power | 1.00 | 13,000.00 | 15,000.00 | 17,000.00 | ||
| Repairs and Maintenance | 2.00 | 26,000.00 | 30,000.00 | 34,000.00 | ||
| Total Variable Overhead cost | 9.00 | 1,17,000.00 | 1,35,000.00 | 1,53,000.00 | ||
| Fixed Cost per month | ||||||
| Depreciation -Building | 24,000.00 | 24,000.00 | 24,000.00 | 24,000.00 | ||
| Depreciation-Machinery | 72,000.00 | 72,000.00 | 72,000.00 | 72,000.00 | ||
| Taxes and Insurance | 17,000.00 | 17,000.00 | 17,000.00 | 17,000.00 | ||
| Supervision | 2,51,500.00 | 2,51,500.00 | 2,51,500.00 | 2,51,500.00 | ||
| Total Fixed Overhead cost | 3,64,500.00 | 3,64,500.00 | 3,64,500.00 | 3,64,500.00 | ||
| Total Factory Overhead | 4,81,500.00 | 4,99,500.00 | 5,17,500.00 | |||
| 4) | ||||||
| Direct Labor cost Variance=AH*AR-SH*SR | ||||||
| AH= | 22,000.00 | |||||
| AR= | 12.30 | |||||
| SH=(15000*1.8) | 27,000.00 | |||||
| SR= | 12.00 | |||||
| Direct Labor cost Variance=AH*AR-SH*SR=22000*$12.30-27000*12 | 53,400.00 | (F) | ||||
| Direct Labor Rate Variance=AH*(AR-SR)=22000*($12.30-$12) | 6,600.00 | (U) | ||||
| Direct Labor Efficiency Variance=SR*(AH-SH)=$12*(22000-27000) | 60,000.00 | (F) | ||||
| Antuan Company | ||||||
| 5) | Overhead Variance Report | |||||
| For the month ended October 31st | ||||||
| At 75% Capacity Level -15000 units | (A) | (B) | (A)-(B) | |||
| Flexible Budget | Actual Budget | Variance | ||||
| Variable Cost | ||||||
| Indirect Material | 15,000.00 | 41,350.00 | 26,350.00 | (U) | ||
| Indirect Labor | 75,000.00 | 1,76,600.00 | 1,01,600.00 | (U) | ||
| Power | 15,000.00 | 17,250.00 | 2,250.00 | (U) | ||
| Repairs and Maintenance | 30,000.00 | 34,500.00 | 4,500.00 | (U) | ||
| Total Variable Overhead cost | 1,35,000.00 | 2,69,700.00 | 1,34,700.00 | (U) | ||
| Fixed Cost | - | |||||
| Depreciation -Building | 24,000.00 | 24,000.00 | ||||
| Depreciation-Machinery | 72,000.00 | 97,200.00 | 25,200.00 | (U) | ||
| Taxes and Insurance | 17,000.00 | 15,300.00 | 1,700.00 | (F) | ||
| Supervision | 2,51,500.00 | 2,51,500.00 | - | |||
| Total Fixed Overhead cost | 3,64,500.00 | 3,88,000.00 | 23,500.00 | (U) | ||
| Total Factory Overhead | 4,99,500.00 | 6,57,700.00 | 1,58,200.00 | (U) | ||
| When Actual Expenses > Flexible Budget Expenses= | Unfavorable variance | |||||
| When Actual Expenses | Favorable Variance |
