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Antuan Company set the following standard costs per unit for its product. Direct materials (3.0 pounds @ $5.00 per pound) Direct labor (1.6 hours @ $13.00 per hour) Overhead (1.6 hours @ $18.50 per hour) Standard cost per unit $ 15.00 20.80 29.60 $ 65.40 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 $ 15,000 75,000 15,000 Maintenance 30,000 Total variable overhead costs 135,000 Fixed overhead costs Depreciation-Building 25,000 Depreciation-Machinery Taxes and insurance Supervisory salaries 71,000 16,000 197,000 309,000 $ 444,000 Total fixed overhead costs Total overhead costs The company incurred the following actual costs when it operated at 75% of capacity in October. Direct materials (45,500 pounds @ $5.10 per pound) Direct labor (20,000 hours @ $13.20 per hour) Overhead costs Indirect materials Indirect labor Power Maintenance Depreciation-Building Depreciation-Machinery Taxes and insurance Supervisory salaries Total costs $ 232,050 264,000 $ 41,100 176,950 17,250 34,500 25,000 95,850 14,400 197,000 602,050 $ 1,098,100 4. Prepare a detailed overhead variance report that shows the variances for individual items of overhead. Note: Indicate the effect of each variance by selecting favorable, unfavorable, or no variance.

Antuan Company set the following standard costs per unit for its product. Direct materials (3.0 pounds @ $5.00 per pound) Direct labor (1.6 hours @ $13.00 per hour) Overhead (1.6 hours @ $18.50 per hour) Standard cost per unit $ 15.00 20.80 29.60 $ 65.40 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 $ 15,000 75,000 15,000 Maintenance 30,000 Total variable overhead costs 135,000 Fixed overhead costs Depreciation-Building 25,000 Depreciation-Machinery Taxes and insurance Supervisory salaries 71,000 16,000 197,000 309,000 $ 444,000 Total fixed overhead costs Total overhead costs The company incurred the following actual costs when it operated at 75% of capacity in October. Direct materials (45,500 pounds @ $5.10 per pound) Direct labor (20,000 hours @ $13.20 per hour) Overhead costs Indirect materials Indirect labor Power Maintenance Depreciation-Building Depreciation-Machinery Taxes and insurance Supervisory salaries Total costs $ 232,050 264,000 $ 41,100 176,950 17,250 34,500 25,000 95,850 14,400 197,000 602,050 $ 1,098,100 4. Prepare a detailed overhead variance report that shows the variances for individual items of overhead. Note: Indicate the effect of each variance by selecting favorable, unfavorable, or no variance.

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
Chapter2: Basic Cost Management Concepts
Section: Chapter Questions
Problem 21E: Ellerson Company provided the following information for the last calendar year: During the year,...
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Antuan Company set the following standard costs per unit for its product. Direct materials (3.0 pounds @ $5.00 per pound) Direct labor (1.6 hours @ $13.00 per hour) Overhead (1.6 hours @ $18.50 per hour) Standard cost per unit $ 15.00 20.80 29.60 $ 65.40 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 $ 15,000 75,000 15,000 Maintenance 30,000 Total variable overhead costs 135,000 Fixed overhead costs Depreciation-Building 25,000 Depreciation-Machinery Taxes and insurance Supervisory salaries 71,000 16,000 197,000 309,000 $ 444,000 Total fixed overhead costs Total overhead costs The company incurred the following actual costs when it operated at 75% of capacity in October. Direct materials (45,500 pounds @ $5.10 per pound) Direct labor (20,000 hours @ $13.20 per hour) Overhead costs Indirect materials Indirect labor Power Maintenance Depreciation-Building Depreciation-Machinery Taxes and insurance Supervisory salaries Total costs $ 232,050 264,000 $ 41,100 176,950 17,250 34,500 25,000 95,850 14,400 197,000 602,050 $ 1,098,100 4. Prepare a detailed overhead variance report that shows the variances for individual items of overhead. Note: Indicate the effect of each variance by selecting favorable, unfavorable, or no variance.
Transcribed Image Text:Antuan Company set the following standard costs per unit for its product. Direct materials (3.0 pounds @ $5.00 per pound) Direct labor (1.6 hours @ $13.00 per hour) Overhead (1.6 hours @ $18.50 per hour) Standard cost per unit $ 15.00 20.80 29.60 $ 65.40 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 $ 15,000 75,000 15,000 Maintenance 30,000 Total variable overhead costs 135,000 Fixed overhead costs Depreciation-Building 25,000 Depreciation-Machinery Taxes and insurance Supervisory salaries 71,000 16,000 197,000 309,000 $ 444,000 Total fixed overhead costs Total overhead costs The company incurred the following actual costs when it operated at 75% of capacity in October. Direct materials (45,500 pounds @ $5.10 per pound) Direct labor (20,000 hours @ $13.20 per hour) Overhead costs Indirect materials Indirect labor Power Maintenance Depreciation-Building Depreciation-Machinery Taxes and insurance Supervisory salaries Total costs $ 232,050 264,000 $ 41,100 176,950 17,250 34,500 25,000 95,850 14,400 197,000 602,050 $ 1,098,100 4. Prepare a detailed overhead variance report that shows the variances for individual items of overhead. Note: Indicate the effect of each variance by selecting favorable, unfavorable, or no variance.
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