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Antuan Company set the following standard costs per unit for its product. Direct materials (6 pounds @ $5 per pound) $ 30 Direct labor (2 hours @ $17 per hour) 34 Overhead (2 hours @ $18.50 per hour) 37 Standard cost per unit $ 101 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. $ 45,000 Indirect labor 180,000 Power 45,000 Maintenance 90,000 360,000 Total variable overhead costs. Fixed overhead costs 24,000 Depreciation-Building Depreciation-Machinery 80,000 Taxes and insurance 12,000 Supervisory salaries. 79,000 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 pounds @ $5.10 per pound) $ 464,100 526, 125 Direct labor (30,500 hours @ $17.25 per hour) Overhead costs Indirect materials $ 44,250 Indirect labor 177,750 Power 43,000 Maintenance 96,000 24,000 Depreciation-Building Depreciation-Machinery 75,000 Taxes and insurance 11,500 Supervisory salaries. 89,000 560,500 Total costs $ 1,550,725

Antuan Company set the following standard costs per unit for its product. Direct materials (6 pounds @ $5 per pound) $ 30 Direct labor (2 hours @ $17 per hour) 34 Overhead (2 hours @ $18.50 per hour) 37 Standard cost per unit $ 101 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. $ 45,000 Indirect labor 180,000 Power 45,000 Maintenance 90,000 360,000 Total variable overhead costs. Fixed overhead costs 24,000 Depreciation-Building Depreciation-Machinery 80,000 Taxes and insurance 12,000 Supervisory salaries. 79,000 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 pounds @ $5.10 per pound) $ 464,100 526, 125 Direct labor (30,500 hours @ $17.25 per hour) Overhead costs Indirect materials $ 44,250 Indirect labor 177,750 Power 43,000 Maintenance 96,000 24,000 Depreciation-Building Depreciation-Machinery 75,000 Taxes and insurance 11,500 Supervisory salaries. 89,000 560,500 Total costs $ 1,550,725

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Antuan Company set the following standard costs per unit for its product. Direct materials (6 pounds @ $5 per pound) $ 30 Direct labor (2 hours @ $17 per hour) 34 Overhead (2 hours @ $18.50 per hour) 37 Standard cost per unit $ 101 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 $ 45,000 Indirect materials Indirect labor 180,000 Power 45,000 Maintenance 90,000 costs 360,000 Total var ble ove Fixed overhead costs. 24,000 80,000 Depreciation-Building Depreciation-Machinery Taxes and insurance Supervisory salaries. 12,000 79,000 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 pounds @ $5.10 per pound) $ 464,100 526, 125 Direct labor (30,500 hours @ $17.25 per hour) Overhead costs Indirect materials. $ 44,250 Indirect labor 177,750 Power 43,000 Maintenance 96,000 24,000 Depreciation-Building Depreciation-Machinery 75,000 11,500 Taxes and insurance Supervisory salaries. 89,000 560,500 Total costs $ 1,550,725
Transcribed Image Text:Antuan Company set the following standard costs per unit for its product. Direct materials (6 pounds @ $5 per pound) $ 30 Direct labor (2 hours @ $17 per hour) 34 Overhead (2 hours @ $18.50 per hour) 37 Standard cost per unit $ 101 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 $ 45,000 Indirect materials Indirect labor 180,000 Power 45,000 Maintenance 90,000 costs 360,000 Total var ble ove Fixed overhead costs. 24,000 80,000 Depreciation-Building Depreciation-Machinery Taxes and insurance Supervisory salaries. 12,000 79,000 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 pounds @ $5.10 per pound) $ 464,100 526, 125 Direct labor (30,500 hours @ $17.25 per hour) Overhead costs Indirect materials. $ 44,250 Indirect labor 177,750 Power 43,000 Maintenance 96,000 24,000 Depreciation-Building Depreciation-Machinery 75,000 11,500 Taxes and insurance Supervisory salaries. 89,000 560,500 Total costs $ 1,550,725
3. Compute the direct labor variance, including its rate and efficiency variances. (Indicate the effect of each variance by selecting favorable, unfavorable, or no variance. Round "Rate per hour" answers to two decimal places.) Standard Cost Actual Cost $ 0 $ 0 0 0 $
Transcribed Image Text:3. Compute the direct labor variance, including its rate and efficiency variances. (Indicate the effect of each variance by selecting favorable, unfavorable, or no variance. Round "Rate per hour" answers to two decimal places.) Standard Cost Actual Cost $ 0 $ 0 0 0 $
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