Antuan Company set the following standard costs per unit for its product. $ 30 Direct materials (6 pounds @ $5 per pound) Direct labor (2 hours@ $17 per hour) Overhead (2 hours@ $18.50 per hour) 34 37 Standard cost per unit $ 101 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 Indirect labor Power Maintenance Total variable overhead costs Fixed overhead costs Depreciation-Building Depreciation-Machinery Taxes and insurance Supervisory salaries Total fixed overhead costs Total overhead costs Indirect materials Indirect labor Power Maintenance $ 45,000 180,000 Depreciation-Building Depreciation-Machinery Taxes and insurance Supervisory salaries Total costs 45,000 90,000 360,000 The company incurred the following actual costs when it operated at 75% of capacity in October. Direct materials (91,000 pounds @ $5.10 per pound) $ 464,100 526,125 Direct labor (30,500 hours @ $17.25 per hour) Overhead costs 24,000 80,000 12,000 79,000 195,000 $ 555,000 $ 44,250 177,750 43,000 96,000 24,000 75,000 11,500 89,000 560,500 $ 1,550,725
Antuan Company set the following standard costs per unit for its product. $ 30 Direct materials (6 pounds @ $5 per pound) Direct labor (2 hours@ $17 per hour) Overhead (2 hours@ $18.50 per hour) 34 37 Standard cost per unit $ 101 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 Indirect labor Power Maintenance Total variable overhead costs Fixed overhead costs Depreciation-Building Depreciation-Machinery Taxes and insurance Supervisory salaries Total fixed overhead costs Total overhead costs Indirect materials Indirect labor Power Maintenance $ 45,000 180,000 Depreciation-Building Depreciation-Machinery Taxes and insurance Supervisory salaries Total costs 45,000 90,000 360,000 The company incurred the following actual costs when it operated at 75% of capacity in October. Direct materials (91,000 pounds @ $5.10 per pound) $ 464,100 526,125 Direct labor (30,500 hours @ $17.25 per hour) Overhead costs 24,000 80,000 12,000 79,000 195,000 $ 555,000 $ 44,250 177,750 43,000 96,000 24,000 75,000 11,500 89,000 560,500 $ 1,550,725
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 17P: Shinto Corp. uses a standard cost system and manufactures one product. The variable costs per...
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Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
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Transcribed Image Text:3. Compute the direct labor variance, including its rate and efficiency variances. (Indicate the effect of each variance by selecting
favorable, unfavorable, or no variance. Round "Rate per hour" answers to two decimal places.)
Actual Cost
Standard Cost
![[The following information applies to the questions displayed below.]
Antuan Company set the following standard costs per unit for its product.
Direct materials (6 pounds @ $5 per pound)
$ 30
Direct labor (2 hours @ $17 per hour)
Overhead (2 hours @ $18.50 per hour)
34
37
Standard cost per unit
$ 101
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
Indirect labor
Power
Maintenance
Total variable overhead costs
Fixed overhead costs
Depreciation-Building
Depreciation-Machinery
Taxes and insurance
Supervisory salaries
Total fixed overhead costs
Total overhead costs
Indirect materials
Indirect labor
Power
Maintenance
$ 45,000
180,000
45,000
90,000
360,000
The company incurred the following actual costs when it operated at 75% of capacity in October.
Direct materials (91,000 pounds @ $5.10 per pound)
$ 464,100
526,125
Direct labor (30,500 hours @ $17.25 per hour)
Overhead costs
Depreciation-Building
Depreciation-Machinery
Taxes and insurance
Supervisory salaries
Total costs
24,000
80,000
12,000
79,000
195,000
$ 555,000
$ 44,250
177,750
43,000
96,000
24,000
75,000
11,500
89,000
560, 500
$ 1,550,725](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F9de62490-29a1-4126-ad53-0c4c5fc3af72%2F198e0f56-7733-47ee-8bad-11ed258f436d%2Frbxl60g_processed.png&w=3840&q=75)
Transcribed Image Text:[The following information applies to the questions displayed below.]
Antuan Company set the following standard costs per unit for its product.
Direct materials (6 pounds @ $5 per pound)
$ 30
Direct labor (2 hours @ $17 per hour)
Overhead (2 hours @ $18.50 per hour)
34
37
Standard cost per unit
$ 101
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
Indirect labor
Power
Maintenance
Total variable overhead costs
Fixed overhead costs
Depreciation-Building
Depreciation-Machinery
Taxes and insurance
Supervisory salaries
Total fixed overhead costs
Total overhead costs
Indirect materials
Indirect labor
Power
Maintenance
$ 45,000
180,000
45,000
90,000
360,000
The company incurred the following actual costs when it operated at 75% of capacity in October.
Direct materials (91,000 pounds @ $5.10 per pound)
$ 464,100
526,125
Direct labor (30,500 hours @ $17.25 per hour)
Overhead costs
Depreciation-Building
Depreciation-Machinery
Taxes and insurance
Supervisory salaries
Total costs
24,000
80,000
12,000
79,000
195,000
$ 555,000
$ 44,250
177,750
43,000
96,000
24,000
75,000
11,500
89,000
560, 500
$ 1,550,725
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