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Required information Problem 21-3A Flexible budget preparation; computation of materials, labor, and overhead variances; and overhead...

Required information

Problem 21-3A Flexible budget preparation; computation of materials, labor, and overhead variances; and overhead variance report LO P1, P2, P3, P4

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[The following information applies to the questions displayed below.]

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

Direct materials (4.0 Ibs. @ $5.00 per Ib.) $ 20.00
Direct labor (1.6 hrs. @ $11.00 per hr.) 17.60
Overhead (1.6 hrs. @ $18.50 per hr.) 29.60
Total standard cost $ 67.20


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 75,000
Power

15,000

Repairs and maintenance 30,000
Total variable overhead costs $ 135,000
Fixed overhead costs
Depreciation—Building 24,000
Depreciation—Machinery 70,000
Taxes and insurance 17,000
Supervision 198,000
Total fixed overhead costs 309,000
Total overhead costs $ 444,000


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

Direct materials (60,500 Ibs. @ $5.20 per lb.) $ 314,600
Direct labor (23,000 hrs. @ $11.10 per hr.) 255,300
Overhead costs
Indirect materials $ 41,500
Indirect labor 177,000
Power 17,250
Repairs and maintenance 34,500
Depreciation—Building 24,000
Depreciation—Machinery 94,500
Taxes and insurance 15,300
Supervision 198,000 602,050
Total costs $ 1,171,950

rev: 04_27_2020_QC_CS-209738

Problem 21-3A Part 5

5. Prepare a detailed overhead variance report that shows the variances for individual items of overhead. (Indicate the effect of each variance by selecting for favorable, unfavorable, and No variance.)

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