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 overhnead costs
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 overhnead costs
Principles of Cost Accounting
17th Edition
ISBN:9781305087408
Author:Edward J. Vanderbeck, Maria R. Mitchell
Publisher:Edward J. Vanderbeck, Maria R. Mitchell
Chapter8: Standard Cost Accounting—materials, Labor, And Factory Overhead
Section: Chapter Questions
Problem 23E: (Appendix) Calculating factory overhead: three variances Using the data given in E8-17, calculate...
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Antuan Company set the following standard costs for one unit of its product.
Direct materials (3.0 Ibs. @ $5.00 per Ib.) | $ | 15.00 |
Direct labor (2.0 hrs. @ $12.00 per hr.) | 24.00 | |
Overhead (2.0 hrs. @ $18.50 per hr.) | 37.00 | |
Total |
$ | 76.00 |
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 | 90,000 | ||||
Power |
15,000 |
||||
Repairs and maintenance | 45,000 | ||||
Total variable overhead costs | $ | 165,000 | |||
Fixed overhead costs | |||||
24,000 | |||||
Depreciation—Machinery | 70,000 | ||||
Taxes and insurance | 17,000 | ||||
Supervision | 279,000 | ||||
Total fixed overhead costs | 390,000 | ||||
Total overhead costs | $ | 555,000 | |||
The company incurred the following actual costs when it operated at 75% of capacity in October.
Direct materials (45,500 Ibs. @ $5.20 per lb.) | $ | 236,600 | |||
Direct labor (22,000 hrs. @ $12.30 per hr.) | 270,600 | ||||
Overhead costs | |||||
Indirect materials | $ | 41,100 | |||
Indirect labor | 176,400 | ||||
Power | 17,250 | ||||
Repairs and maintenance | 51,750 | ||||
Depreciation—Building | 24,000 | ||||
Depreciation—Machinery | 94,500 | ||||
Taxes and insurance | 15,300 | ||||
Supervision | 279,000 | 699,300 | |||
Total costs | $ | 1,206,500 | |||
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