Antuan Company set the following standard costs for one unit of its product. The predetermined overhead rate

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Question:

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

Direct materials (3.0 lbs. @ $4.0 per Ib.) Direct labor (1.9 hrs. @ $11.0 per hr.) Overhead (1.9 hrs. @ $18.50 per hr.)

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% level.

Overhead Budget (75% Capacity) Variable overhead costs Indirect materials $ 15,000 Indirect labor 75,000 Power 15,000 Re

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

$ 186,550 Direct materials (45,500 Ibs. @ $4.10 per Ib.) Direct labor (31,000 hrs. @ $11.40 per hr.) 353,400 Overhead co

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.

4. Compute the direct labor cost variance, including its rate and efficiency variances.(Round actual rate to 2 decimal p 5. Prepare a detailed overhead variance report that shows the variances for individual items of overhead. ANTUAN COMPANY