Question

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Antuan Company set the following standard costs for one unit of its product.

Direct materials (4.0 Ibs. @ $5.00 per Ib.)	$	20.00
Direct labor (1.9 hrs. @ $11.00 per hr.)		20.90
Overhead (1.9 hrs. @ $18.50 per hr.)		35.15
Total standard cost	$	76.05

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		90,000
Power		15,000
Repairs and maintenance		30,000
Total variable overhead costs				$	150,000
Fixed overhead costs
Depreciation—Building		23,000
Depreciation—Machinery		71,000
Taxes and insurance		16,000
Supervision		267,250
Total fixed overhead costs					377,250
Total overhead costs				$	527,250

The company incurred the following actual costs when it operated at 75% of capacity in October.

Direct materials (61,500 Ibs. @ $5.10 per lb.)				$	313,650
Direct labor (20,000 hrs. @ $11.30 per hr.)					226,000
Overhead costs
Indirect materials	$	41,800
Indirect labor		176,650
Power		17,250
Repairs and maintenance		34,500
Depreciation—Building		23,000
Depreciation—Machinery		95,850
Taxes and insurance		14,400
Supervision		267,250			670,700
Total costs				$	1,210,350

Required:
1&2. Prepare flexible overhead budgets for October showing the amounts of each variable and fixed cost at the 65%, 75%, and 85% capacity levels and classify all items listed in the fixed budget as variable or fixed.

Required: 1&2. Prepare flexible overhead budgets for October showing the amounts of each variable and fixed cost at the 65%, 75%, and 85% capacity levels and classify all items listed in the fixed budget as variable or fixed. ANTUAN COMPANY Flexible Overhead Budgets For Month Ended October 31 Flexible Budget Flexible Budget for Variable Amount Total Fixed 65% of 75% of 85% of per Unit Cost capacity capacity capacity Sales (in units) Variable overhead costs $ 0.00 Fixed overhead costs 0 0 0 0 Total overhead costs

Answer 1

Solution 1 and 2:

DEF G H I Flexible Budget for Antuan company Flexible Overhead Budget For month ended Oct 31 Flexible Budget Variable amount per Total fixed cost 65% of capacity unit 13000 Particulars 75% of capacity 85% of capacity 15000T 1 7000 Sales (In units) Variable overhead costs: Indirect materials Indirect labor Power Repairs and maintenance Total variable costs Fixed overhead costs: Depreciation - Building Depreciation - Machinery Taxes and Insurance Supervision Total fixed costs $1.00 $6.00 $1.00 $2.00 $10.00 $13,000 $78,000 $13,000 $26,000 $130,000 $15,000 $90,000 $15,000 $30,000 $150,000 $17,000 $102,000 $17,000 $34,000 $170,000 $23,000 $71,000 $16,000 $267,250 $377,250 $23,000 $71,000 $16,000 $267,250 $377,250 $23,000 $71,000 $16,000 $267,250 $377,250 $23,000 $71,000 $16,000 $267,250 $377,250 22 Total overhead costs $507,250 $527,250 $547,250 23 24 25 5) Sheet93 (2) Sheet702 Sheet708 (2) Sheet181 (5) Sheet707 ) Sheet709 Sheet8 (2) )