Question

Antuan Company set the following standard costs for one unit of its product. Direct materials (6 Ibs. $5 per Ib.) Direct labor (2 hrs. e $17 per hr.) Overhead (2 hrs. $18.50 per hr.) 30 34 37 Total standard cost $101 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 45,000 Indirect labor 180,000 Power 45,000 Repairs and maintenance Total variable overhead costs 90,000 $360,000 Fixed overhead costs Depreciation-Building Depreciation-Machinery Taxes and insurance 24,000 80,000 12,000 79,000 Supervision Total fixed overhead costs 195,000 Total overhead costs $555,000 The company incurred the following actual costs when it operated at 75% of capacity in October. Direct materials (91,000 Ibs. $5.10 per lb.) Direct labor (30,500 hrs. $17.25 per hr.) Overhead costs Indirect materials Indirect labor 464,100 526,125 $44,250 177,750 43,000 96,000 24,000 75,000 11,500 89,000 Power Repairs and maintenance Depreciation-Building Depreciation-Machinery Taxes and insurance Supervision 560,500 Total costs $1,550,725

Answer 1

Direct Material Cost, Price and Quantity Variance AQ 91000 Actual Cost X X 464100 AP 5.10 AOL XL SP 91000 X 5.00 455000 Standard Cost SO X 90000 X 450000 SP 5.00 9100 5000 Direct Material Price Varaince 9100 Unfavorable Direct Material Quantity Varaince 5000 Unfavorable Total Direct Material Varaince 14100 Unfavorable Factory Capacity=20,000 Units 75% Capacity = 20,000*75% Standard Quantity = SQ For 1 Units * Total Prodcued = (15000*6) 15000 90000