Antuan Company set the following standard costs per unit for its product. Direct materials (4.0 pounds...
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Antuan Company set the following standard costs per unit for its product. Direct materials (4.0 pounds @ $5.00 per pound) $20.00 Direct labor (1.9 hours @ $14.00 per hour) 26.60 35.15 Overhead (1.9 hours @ $18.50 per hour) Standard cost per unit $ 81.75 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 $ 15,000 Indirect labor 75,000 Power 15,000 Maintenance 30,000 135,000 Total variable overhead costs Fixed overhead costs 24,000 71,000 Depreciation-Building Depreciation-Machinery Taxes and insurance Supervisory salaries. 17,000 280,250 Total fixed overhead costs 392,250 Total overhead costs. $ 527,250 The company incurred the following actual costs when it operated at 75% of capacity in October. Direct materials (61,000 pounds @ $5.20 per pound) Direct labor (22,000 hours @ $14.20 per hour) $ 317,200 312,400 Overhead costs $ 41,500 Indirect materials Indirect labor 176,600 Power 17,250 Maintenance 34,500 Depreciation-Building 24,000 95,850 Depreciation-Machinery Taxes and insurance Supervisory salaries 15,300 280, 250 685,250 Total costs $ 1,314,850 2. Compute the direct materials variance, including its price and quantity variances. (Indicate the effect of each variance by selecting favorable, unfavorable, or no variance.) Actual Cost Standar Antuan Company set the following standard costs per unit for its product. Direct materials (4.0 pounds @ $5.00 per pound) $20.00 Direct labor (1.9 hours @ $14.00 per hour) 26.60 35.15 Overhead (1.9 hours @ $18.50 per hour) Standard cost per unit $ 81.75 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 $ 15,000 Indirect labor 75,000 Power 15,000 Maintenance 30,000 135,000 Total variable overhead costs Fixed overhead costs 24,000 71,000 Depreciation-Building Depreciation-Machinery Taxes and insurance Supervisory salaries. 17,000 280,250 Total fixed overhead costs 392,250 Total overhead costs. $ 527,250 The company incurred the following actual costs when it operated at 75% of capacity in October. Direct materials (61,000 pounds @ $5.20 per pound) Direct labor (22,000 hours @ $14.20 per hour) $ 317,200 312,400 Overhead costs $ 41,500 Indirect materials Indirect labor 176,600 Power 17,250 Maintenance 34,500 Depreciation-Building 24,000 95,850 Depreciation-Machinery Taxes and insurance Supervisory salaries 15,300 280, 250 685,250 Total costs $ 1,314,850 2. Compute the direct materials variance, including its price and quantity variances. (Indicate the effect of each variance by selecting favorable, unfavorable, or no variance.) Actual Cost Standar
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Related Book For
Fundamental accounting principle
ISBN: 978-0078025587
21st edition
Authors: John J. Wild, Ken W. Shaw, Barbara Chiappetta
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