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Antuan Company set the following standard costs per unit for its product. Direct materials (3.0 pounds @ $6.00 per pound) Direct labor (1.7 hours @ $10.00 per hour) Overhead (1.7 hours @ $18.50 per hour) Standard cost per unit 18.00 17.00 31.45 $ 66.45 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 Indirect labor $ 15,000 75,000 Power 15,000 Maintenance 45,000 Total variable overhead costs 150,000 Fixed overhead costs Depreciation-Building Depreciation-Machinery 23,000 71,000 Taxes and insurance Supervisory salaries 17,000 210,750 321,750 $ 471,750 Total fixed overhead costs Total overhead costs The company incurred the following actual costs when it operated at 75% of capacity in October. Direct materials (46,500 pounds @ $6.20 per pound) Direct labor (20,000 hours @ $10.30 per hour) Overhead costs Indirect materials Indirect labor Power Maintenance Depreciation-Building Depreciation-Machinery Taxes and insurance Supervisory salaries Total costs $ 288,300 206,000 $ 42,000 176,750 17,250 51,750 23,000 95,850 15,300 210,750 632,650 $ 1,126,950 Required: 1. Prepare flexible overhead budgets for October showing amounts of each variable and fixed cost at the 65%, 75%, and 85% capacity levels. ANTUAN COMPANY Flexible Budget at Capacity Level of Flexible Overhead Budgets For Month Ended October 31 Variable Amount Total Fixed per Unit Cost 65% Production (in units) Variable overhead costs Fixed overhead costs Total overhead costs 75% 85%

Antuan Company set the following standard costs per unit for its product. Direct materials (3.0 pounds @ $6.00 per pound) Direct labor (1.7 hours @ $10.00 per hour) Overhead (1.7 hours @ $18.50 per hour) Standard cost per unit 18.00 17.00 31.45 $ 66.45 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 Indirect labor $ 15,000 75,000 Power 15,000 Maintenance 45,000 Total variable overhead costs 150,000 Fixed overhead costs Depreciation-Building Depreciation-Machinery 23,000 71,000 Taxes and insurance Supervisory salaries 17,000 210,750 321,750 $ 471,750 Total fixed overhead costs Total overhead costs The company incurred the following actual costs when it operated at 75% of capacity in October. Direct materials (46,500 pounds @ $6.20 per pound) Direct labor (20,000 hours @ $10.30 per hour) Overhead costs Indirect materials Indirect labor Power Maintenance Depreciation-Building Depreciation-Machinery Taxes and insurance Supervisory salaries Total costs $ 288,300 206,000 $ 42,000 176,750 17,250 51,750 23,000 95,850 15,300 210,750 632,650 $ 1,126,950 Required: 1. Prepare flexible overhead budgets for October showing amounts of each variable and fixed cost at the 65%, 75%, and 85% capacity levels. ANTUAN COMPANY Flexible Budget at Capacity Level of Flexible Overhead Budgets For Month Ended October 31 Variable Amount Total Fixed per Unit Cost 65% Production (in units) Variable overhead costs Fixed overhead costs Total overhead costs 75% 85%

Managerial Accounting: The Cornerstone of Business Decision-Making
Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter10: Standard Costing And Variance Analysis
Section: Chapter Questions
Problem 72P: Moleno Company produces a single product and uses a standard cost system. The normal production...
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Antuan Company set the following standard costs per unit for its product. Direct materials (3.0 pounds @ $6.00 per pound) Direct labor (1.7 hours @ $10.00 per hour) Overhead (1.7 hours @ $18.50 per hour) Standard cost per unit 18.00 17.00 31.45 $ 66.45 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 Indirect labor $ 15,000 75,000 Power 15,000 Maintenance 45,000 Total variable overhead costs 150,000 Fixed overhead costs Depreciation-Building Depreciation-Machinery 23,000 71,000 Taxes and insurance Supervisory salaries 17,000 210,750 321,750 $ 471,750 Total fixed overhead costs Total overhead costs The company incurred the following actual costs when it operated at 75% of capacity in October. Direct materials (46,500 pounds @ $6.20 per pound) Direct labor (20,000 hours @ $10.30 per hour) Overhead costs Indirect materials Indirect labor Power Maintenance Depreciation-Building Depreciation-Machinery Taxes and insurance Supervisory salaries Total costs $ 288,300 206,000 $ 42,000 176,750 17,250 51,750 23,000 95,850 15,300 210,750 632,650 $ 1,126,950 Required: 1. Prepare flexible overhead budgets for October showing amounts of each variable and fixed cost at the 65%, 75%, and 85% capacity levels. ANTUAN COMPANY Flexible Budget at Capacity Level of Flexible Overhead Budgets For Month Ended October 31 Variable Amount Total Fixed per Unit Cost 65% Production (in units) Variable overhead costs Fixed overhead costs Total overhead costs 75% 85%
Transcribed Image Text:Antuan Company set the following standard costs per unit for its product. Direct materials (3.0 pounds @ $6.00 per pound) Direct labor (1.7 hours @ $10.00 per hour) Overhead (1.7 hours @ $18.50 per hour) Standard cost per unit 18.00 17.00 31.45 $ 66.45 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 Indirect labor $ 15,000 75,000 Power 15,000 Maintenance 45,000 Total variable overhead costs 150,000 Fixed overhead costs Depreciation-Building Depreciation-Machinery 23,000 71,000 Taxes and insurance Supervisory salaries 17,000 210,750 321,750 $ 471,750 Total fixed overhead costs Total overhead costs The company incurred the following actual costs when it operated at 75% of capacity in October. Direct materials (46,500 pounds @ $6.20 per pound) Direct labor (20,000 hours @ $10.30 per hour) Overhead costs Indirect materials Indirect labor Power Maintenance Depreciation-Building Depreciation-Machinery Taxes and insurance Supervisory salaries Total costs $ 288,300 206,000 $ 42,000 176,750 17,250 51,750 23,000 95,850 15,300 210,750 632,650 $ 1,126,950 Required: 1. Prepare flexible overhead budgets for October showing amounts of each variable and fixed cost at the 65%, 75%, and 85% capacity levels. ANTUAN COMPANY Flexible Budget at Capacity Level of Flexible Overhead Budgets For Month Ended October 31 Variable Amount Total Fixed per Unit Cost 65% Production (in units) Variable overhead costs Fixed overhead costs Total overhead costs 75% 85%
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