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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 (5.0 Ibs. @ $6.00 per Ib.) | $ | 30.00 |
| Direct labor (1.7 hrs. @ $14.00 per hr.) | 23.80 | |
| Overhead (1.7 hrs. @ $18.50 per hr.) | 31.45 | |
| Total standard cost | $ | 85.25 |
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 | $ | 135,000 | |||
| Fixed overhead costs | |||||
| Depreciation—Building | 23,000 | ||||
| Depreciation—Machinery | 70,000 | ||||
| Taxes and insurance | 17,000 | ||||
| Supervision | 226,750 | ||||
| Total fixed overhead costs | 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 (76,000 Ibs. @ $6.20 per lb.) | $ | 471,200 | |||
| Direct labor (22,000 hrs. @ $14.10 per hr.) | 310,200 | ||||
| Overhead costs | |||||
| Indirect materials | $ | 41,250 | |||
| Indirect labor | 176,950 | ||||
| Power | 17,250 | ||||
| Repairs and maintenance | 34,500 | ||||
| Depreciation—Building | 23,000 | ||||
| Depreciation—Machinery | 94,500 | ||||
| Taxes and insurance | 15,300 | ||||
| Supervision | 226,750 | 629,500 | |||
| Total costs | $ | 1,410,900 | |||
rev: 03_28_2018_QC_CS-122864
5. Prepare a detailed overhead variance report that shows the variances for individual items of overhead.
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