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[The following information applies to the questions displayed below.) Antuan Company set the following standard costs per unit for its product. Direct materials (4.0 pounds @ $5.00 per pound) Direct labor (1.6 hours $12.00 per hour) Overhead (1.6 hours $18.50 per hour) Standard cost per unit 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 $15,000 75,000 15,000 30,000 135,000 Indirect materials Indirect labor Power 25,000 71,000 17,000 196,000 309,000 444,000 The company incurred the following actual costs when it operated at 75% of capacity in October. $ 317,200 256,200 Direct materials (61,000 pounds $5.20 per pound) Direct labor (21,000 hours $12.20 per hour) Overhead costa Maintenance Depreciation Building Depreciation Machinery Taxes and insurance Supervisory salaries Total costs $ 20.00 19.20 29.60 $ 68.80 $ 41,900 176,500 17,250 34,500 25,000 95,850 15,300 196,000 602,300 $1,175,700 Required: 1. Prepare flexible overhead budgets for October showing amounts of each variable and fixed cost at the 65%, 75%, and 85% capacity levels.

[The following information applies to the questions displayed below.) Antuan Company set the following standard costs per unit for its product. Direct materials (4.0 pounds @ $5.00 per pound) Direct labor (1.6 hours $12.00 per hour) Overhead (1.6 hours $18.50 per hour) Standard cost per unit 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 $15,000 75,000 15,000 30,000 135,000 Indirect materials Indirect labor Power 25,000 71,000 17,000 196,000 309,000 444,000 The company incurred the following actual costs when it operated at 75% of capacity in October. $ 317,200 256,200 Direct materials (61,000 pounds $5.20 per pound) Direct labor (21,000 hours $12.20 per hour) Overhead costa Maintenance Depreciation Building Depreciation Machinery Taxes and insurance Supervisory salaries Total costs $ 20.00 19.20 29.60 $ 68.80 $ 41,900 176,500 17,250 34,500 25,000 95,850 15,300 196,000 602,300 $1,175,700 Required: 1. Prepare flexible overhead budgets for October showing amounts of each variable and fixed cost at the 65%, 75%, and 85% capacity levels.

Cornerstones of Cost Management (Cornerstones Series)
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter9: Standard Costing: A Functional-based Control Approach
Section: Chapter Questions
Problem 33P: Business Specialty, Inc., manufactures two staplers: small and regular. The standard quantities of...
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Required information [The following information applies to the questions displayed below.] Antuan Company set the following standard costs per unit for its product. $ 20.00 Direct materials (4.0 pounds @ $5.00 per pound) Direct labor (1.6 hours $12.00 per hour) Overhead (1.6 hours 19.20 $18.50 per hour) 29.60 Standard cost per unit $ 68.80 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 The company incurred the following actual costs when it operated at 75% of capacity in October. Direct materials (61,000 pounds $5.20 per pound) Direct labor (21,000 hours @ $12.20 per hour) $ 317,200 256,200 Overhead costs Maintenance Depreciation Building Depreciation Machinery Taxes and insurance Supervisory salaries Total costs For Month Ended October 31 Production (in units) Variable overhead costs Indirect materials. Indirect labor Power Maintenance Fixed overhead costs Depreciation Building ✔ Depreciation Machinery Total overhead costs Required: 1. Prepare flexible overhead budgets for October showing amounts of each variable and fixed cost at the 65%, 75%, and 85% capacity levels. ✓ S • Ⓒ ♥ Taxes and insurance ✔ Supervisory salaries Variable Amount per Unit $ $ 15,000 75,000 15,000 30,000 135,000 1.00✓ 5.00✔ 1.00 2.00 25,000 71,000 17,000 196,000 309,000 $444,000 ANTUAN COMPANY Flexible Overhead Budgets Total Fixed Cost 9.00 Answer is not complete. $ 286,000 70,000 X 17,000✔✓ 199,000 $ 41,900 176,500 17,250 34,500 $ 13,000 S 65,000✔ 13,000 → 26,000✔✔ $ 117,000 25,000 95,850 15,300 196,000 Flexible Budget at Capacity Level of 65% 12,000 x 75% $ 23,000 70,000 17,000✔✓ 199,000x 15,000✔✔ $ 135,000 15,000 $ 17,000 75,000 → 15,000 30,000✔ S 23,000 70,000 X 602,300 $1,175,700 17,000 ✓ 199,000 $309,000 $ 309,000 $426,000 $ 444,000 85% 17,000 → 85,000✔✔ 17,000 → 34,000 $ 153,000 S 23,000 X 70,000 x 17,000✔ 199,000 $ 309,000 S 462,000
Transcribed Image Text:Required information [The following information applies to the questions displayed below.] Antuan Company set the following standard costs per unit for its product. $ 20.00 Direct materials (4.0 pounds @ $5.00 per pound) Direct labor (1.6 hours $12.00 per hour) Overhead (1.6 hours 19.20 $18.50 per hour) 29.60 Standard cost per unit $ 68.80 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 The company incurred the following actual costs when it operated at 75% of capacity in October. Direct materials (61,000 pounds $5.20 per pound) Direct labor (21,000 hours @ $12.20 per hour) $ 317,200 256,200 Overhead costs Maintenance Depreciation Building Depreciation Machinery Taxes and insurance Supervisory salaries Total costs For Month Ended October 31 Production (in units) Variable overhead costs Indirect materials. Indirect labor Power Maintenance Fixed overhead costs Depreciation Building ✔ Depreciation Machinery Total overhead costs Required: 1. Prepare flexible overhead budgets for October showing amounts of each variable and fixed cost at the 65%, 75%, and 85% capacity levels. ✓ S • Ⓒ ♥ Taxes and insurance ✔ Supervisory salaries Variable Amount per Unit $ $ 15,000 75,000 15,000 30,000 135,000 1.00✓ 5.00✔ 1.00 2.00 25,000 71,000 17,000 196,000 309,000 $444,000 ANTUAN COMPANY Flexible Overhead Budgets Total Fixed Cost 9.00 Answer is not complete. $ 286,000 70,000 X 17,000✔✓ 199,000 $ 41,900 176,500 17,250 34,500 $ 13,000 S 65,000✔ 13,000 → 26,000✔✔ $ 117,000 25,000 95,850 15,300 196,000 Flexible Budget at Capacity Level of 65% 12,000 x 75% $ 23,000 70,000 17,000✔✓ 199,000x 15,000✔✔ $ 135,000 15,000 $ 17,000 75,000 → 15,000 30,000✔ S 23,000 70,000 X 602,300 $1,175,700 17,000 ✓ 199,000 $309,000 $ 309,000 $426,000 $ 444,000 85% 17,000 → 85,000✔✔ 17,000 → 34,000 $ 153,000 S 23,000 X 70,000 x 17,000✔ 199,000 $ 309,000 S 462,000
2. Compute the direct materials variance, including its price and quantity variances. (Indicate the effect of each variance by selecting favorable, unfavorable, or no variance.) Actual quantity 239,800 Actual Cost Actual hours 21,000 $ 1,818,800 Variable overhead spending variance Variable overhead efficiency variance Total variable overhead cost variance X X Actual Cost X X $ 256,200 S Direct labor rate variance Direct labor efficiency variance Total direct materials variance S Actual price Actual rate 7.58 12.20 $380,000 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.) $ 4,200 $ Actual quantity $ $ $ 239,800 X X $ 1,438,800 Actual hours 380,000 Unfavorable 30,000 Unfavorable 19,800 Unfavorable 21,000 X Standard price $ XS $252,000 4,200 Unfavorable 36,000 Favorable 40,200 Favorable 6.00 Standard rate $ 30,000 12.00 Standard quantity $36,000 Standard Cost X X $ 1,468,800 244,800 Standard hours Standard Cost 24,000 X X $288,000 S Standard price Standard rate 12.00 $ 6.00
Transcribed Image Text:2. Compute the direct materials variance, including its price and quantity variances. (Indicate the effect of each variance by selecting favorable, unfavorable, or no variance.) Actual quantity 239,800 Actual Cost Actual hours 21,000 $ 1,818,800 Variable overhead spending variance Variable overhead efficiency variance Total variable overhead cost variance X X Actual Cost X X $ 256,200 S Direct labor rate variance Direct labor efficiency variance Total direct materials variance S Actual price Actual rate 7.58 12.20 $380,000 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.) $ 4,200 $ Actual quantity $ $ $ 239,800 X X $ 1,438,800 Actual hours 380,000 Unfavorable 30,000 Unfavorable 19,800 Unfavorable 21,000 X Standard price $ XS $252,000 4,200 Unfavorable 36,000 Favorable 40,200 Favorable 6.00 Standard rate $ 30,000 12.00 Standard quantity $36,000 Standard Cost X X $ 1,468,800 244,800 Standard hours Standard Cost 24,000 X X $288,000 S Standard price Standard rate 12.00 $ 6.00
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