Antuan Company set the following standard costs per unit for its product. Direct materials (3.0...
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Antuan Company set the following standard costs per unit for its product. Direct materials (3.0 pounds @ $4.00 per pound) $ 12.00 Direct labor (1.7 hours @ $10.00 per hour) 17.00 Overhead (1.7 hours @ $18.50 per hour) 31.45 Standard cost per unit $ 60.45
The standard overhead rate ($18.50 per direct labor hour) is based on a predicted activity level of 75% of the factorys capacity of 20,000 units per month. Following are the companys budgeted overhead costs per month at the 75% capacity level.
1. Prepare flexible overhead budgets for October showing amounts of each variable and fixed cost at the 65%, 75%, and 85% capacity levels.
The company incurred the following actual costs when it operated at 75% of capacity in October
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