Direct materials (3.0 Ibs. @ $5.00 per Ib.) $ 15.00 Direct labor (1.8 hrs. @ $12.00 per hr.) 21.60 Overhead (1.8 hrs. @ $18.50 per hr.) 33.30 Total standard cost $ 69.90 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 $ 15,000 Indirect labor 90,000 Power 15,000 Repairs and maintenance 30,000 Total variable overhead costs $ 150,000 Fixed overhead costs Depreciation—Building 23,000 Depreciation—Machinery 70,000 Taxes and insurance 17,000 Supervision 239,500 Total fixed overhead costs 349,500 Total overhead costs $ 499,500 The company incurred the following actual costs when it operated at 75% of capacity in October. Direct materials (46,000 Ibs. @ $5.20 per lb.) $ 239,200 Direct labor (19,000 hrs. @ $12.30 per hr.) 233,700 Overhead costs Indirect materials $ 41,600 Indirect labor 176,500 Power 17,250 Repairs and maintenance 34,500 Depreciation—Building 23,000 Depreciation—Machinery 94,500 Taxes and insurance 15,300 Supervision 239,500 642,150 Total costs $ 1,115,050
Direct materials (3.0 Ibs. @ $5.00 per Ib.) $ 15.00 Direct labor (1.8 hrs. @ $12.00 per hr.) 21.60 Overhead (1.8 hrs. @ $18.50 per hr.) 33.30 Total standard cost $ 69.90 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 $ 15,000 Indirect labor 90,000 Power 15,000 Repairs and maintenance 30,000 Total variable overhead costs $ 150,000 Fixed overhead costs Depreciation—Building 23,000 Depreciation—Machinery 70,000 Taxes and insurance 17,000 Supervision 239,500 Total fixed overhead costs 349,500 Total overhead costs $ 499,500 The company incurred the following actual costs when it operated at 75% of capacity in October. Direct materials (46,000 Ibs. @ $5.20 per lb.) $ 239,200 Direct labor (19,000 hrs. @ $12.30 per hr.) 233,700 Overhead costs Indirect materials $ 41,600 Indirect labor 176,500 Power 17,250 Repairs and maintenance 34,500 Depreciation—Building 23,000 Depreciation—Machinery 94,500 Taxes and insurance 15,300 Supervision 239,500 642,150 Total costs $ 1,115,050
Chapter8: Standard Costs And Variances
Section: Chapter Questions
Problem 8PA: Breakaway Companys labor information for May is as follows: A. What is the actual direct labor rate...
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Direct materials (3.0 Ibs. @ $5.00 per Ib.) | $ | 15.00 |
Direct labor (1.8 hrs. @ $12.00 per hr.) | 21.60 | |
33.30 | ||
Total |
$ | 69.90 |
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 | $ | 15,000 | |||
Indirect labor | 90,000 | ||||
Power |
15,000 |
||||
Repairs and maintenance | 30,000 | ||||
Total variable overhead costs | $ | 150,000 | |||
Fixed overhead costs | |||||
Depreciation—Building | 23,000 | ||||
Depreciation—Machinery | 70,000 | ||||
Taxes and insurance | 17,000 | ||||
Supervision | 239,500 | ||||
Total fixed overhead costs | 349,500 | ||||
Total overhead costs | $ | 499,500 | |||
The company incurred the following actual costs when it operated at 75% of capacity in October.
Direct materials (46,000 Ibs. @ $5.20 per lb.) | $ | 239,200 | |||
Direct labor (19,000 hrs. @ $12.30 per hr.) | 233,700 | ||||
Overhead costs | |||||
Indirect materials | $ | 41,600 | |||
Indirect labor | 176,500 | ||||
Power | 17,250 | ||||
Repairs and maintenance | 34,500 | ||||
Depreciation—Building | 23,000 | ||||
Depreciation—Machinery | 94,500 | ||||
Taxes and insurance | 15,300 | ||||
Supervision | 239,500 | 642,150 | |||
Total costs | $ | 1,115,050 | |||
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