Question

Required information [The following information applies to the questions displayed below.) Antuan Company set the following standard costs for one unit of its product. Direct materials (3.0 Ibs. @ $5.00 per Ib.) Direct labor (1.9 hrs. @ $11.00 per hr.) Overhead (1.9 hrs. @ $18.50 per hr.) Total standard cost $15.00 20.90 35.15 $71.05 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 75,000 Power 15,000 Repairs and maintenance 30,000 Total variable overhead costs Fixed overhead costs Depreciation-Building 24,000 Depreciation Machinery 72,000 Taxes and insurance 16,000 Supervision 280,250 Total fixed overhead costs Total overhead costs $135,000 392,250 $527,250

Answer 1

Solution 1&2:

Antuan company
Flexible Overhead Budget
For month ended Oct 31
Particulars	Flexible Budget		Flexible Budget for
	Variable amount per unit	Total fixed cost	65% of capacity	75% of capacity	85% of capacity
Sales (In units)			13000	15000	17000
Variable overhead costs:
Indirect materials	$1.00		$13,000.00	$15,000.00	$17,000.00
Indirect labor	$5.00		$65,000.00	$75,000.00	$85,000.00
Power	$1.00		$13,000.00	$15,000.00	$17,000.00
Repairs and maintenance	$2.00		$26,000.00	$30,000.00	$34,000.00
Total variable costs	$9.00		$117,000.00	$135,000.00	$153,000.00
Fixed overhead costs:
Depreciation - Building		$24,000.00	$24,000.00	$24,000.00	$24,000.00
Depreciation - Machinery		$72,000.00	$70,000.00	$70,000.00	$70,000.00
Taxes and Insurance		$16,000.00	$17,000.00	$17,000.00	$17,000.00
Supervision		$280,250.00	$281,250.00	$281,250.00	$281,250.00
Total fixed costs		$392,250.00	$392,250.00	$392,250.00	$392,250.00
Total overhead costs			$509,250.00	$527,250.00	$545,250.00