Antuan Company set the following standard costs per unit for its product. Direct materials (5.0 pounds @ $6.00 per pound) $ 30.00 Direct labor (1.9 hours @ $11.00 per hour) 20.90 Overhead (1.9 hours @ $18.50 per hour) 35.15 Standard cost per unit $ 86.05 The standard overhead rate ($18.50 per direct labor hour) is based on a predicted activity level 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 $ 30,000 Indirect labor 75,000 Power 30,000 Maintenance 30,000 Total variable overhead costs 165,000 Fixed overhead costs Depreciation—Building 24,000 Depreciation—Machinery 70,000 Taxes and insurance 18,000 Supervisory salaries 250,250 Total fixed overhead costs 362,250 Total overhead costs $ 527,250 The company incurred the following actual costs when it operated at 75% of capacity in October. Direct materials (76,000 pounds @ $6.10 per pound) $ 463,600 Direct labor (19,000 hours @ $11.20 per hour) 212,800 Overhead costs Indirect materials $ 41,950 Indirect labor 176,200 Power 34,500 Maintenance 34,500 Depreciation—Building 24,000 Depreciation—Machinery 94,500 Taxes and insurance 16,200 Supervisory salaries 250,250 672,100 Total costs $ 1,348,500 Required: 1. Prepare flexible overhead budgets for October showing amounts of each variable and fixed cost at the 65%, 75%, and 85% capacity levels.
Antuan Company set the following standard costs per unit for its product. Direct materials (5.0 pounds @ $6.00 per pound) $ 30.00 Direct labor (1.9 hours @ $11.00 per hour) 20.90 Overhead (1.9 hours @ $18.50 per hour) 35.15 Standard cost per unit $ 86.05 The standard overhead rate ($18.50 per direct labor hour) is based on a predicted activity level 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 $ 30,000 Indirect labor 75,000 Power 30,000 Maintenance 30,000 Total variable overhead costs 165,000 Fixed overhead costs Depreciation—Building 24,000 Depreciation—Machinery 70,000 Taxes and insurance 18,000 Supervisory salaries 250,250 Total fixed overhead costs 362,250 Total overhead costs $ 527,250 The company incurred the following actual costs when it operated at 75% of capacity in October. Direct materials (76,000 pounds @ $6.10 per pound) $ 463,600 Direct labor (19,000 hours @ $11.20 per hour) 212,800 Overhead costs Indirect materials $ 41,950 Indirect labor 176,200 Power 34,500 Maintenance 34,500 Depreciation—Building 24,000 Depreciation—Machinery 94,500 Taxes and insurance 16,200 Supervisory salaries 250,250 672,100 Total costs $ 1,348,500 Required: 1. Prepare flexible overhead budgets for October showing amounts of each variable and fixed cost at the 65%, 75%, and 85% capacity levels.
Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter10: Standard Costing And Variance Analysis
Section: Chapter Questions
Problem 58E: At the beginning of the year, Lopez Company had the following standard cost sheet for one of its...
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Antuan Company set the following standard costs per unit for its product.
Direct materials (5.0 pounds @ $6.00 per pound) | $ 30.00 |
---|---|
Direct labor (1.9 hours @ $11.00 per hour) | 20.90 |
35.15 | |
$ 86.05 |
The standard overhead rate ($18.50 per direct labor hour) is based on a predicted activity level 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 | $ 30,000 |
Indirect labor | 75,000 |
Power | 30,000 |
Maintenance | 30,000 |
Total variable overhead costs | 165,000 |
Fixed overhead costs | |
24,000 | |
Depreciation—Machinery | 70,000 |
Taxes and insurance | 18,000 |
Supervisory salaries | 250,250 |
Total fixed overhead costs | 362,250 |
Total overhead costs | $ 527,250 |
The company incurred the following actual costs when it operated at 75% of capacity in October.
Direct materials (76,000 pounds @ $6.10 per pound) | $ 463,600 | |
---|---|---|
Direct labor (19,000 hours @ $11.20 per hour) | 212,800 | |
Overhead costs | ||
Indirect materials | $ 41,950 | |
Indirect labor | 176,200 | |
Power | 34,500 | |
Maintenance | 34,500 | |
Depreciation—Building | 24,000 | |
Depreciation—Machinery | 94,500 | |
Taxes and insurance | 16,200 | |
Supervisory salaries | 250,250 | 672,100 |
Total costs | $ 1,348,500 |
Required:
1. Prepare flexible overhead budgets for October showing amounts of each variable and fixed cost at the 65%, 75%, and 85% capacity levels.
Please dont give image based answers thank you
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