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

Direct materials (6 Ibs. @ $ 5 per Ib.) . . . . . . . . . $ 30

Direct labor (2 hrs. @ $ 17 per hr.) . . . . . . . . . . 34

Overhead (2 hrs. @ $ 18.50 per hr.) . . . . . . . . . . 37

Total standard cost . . . . . . . . . . . . . . . . . . . . . . . . $ 101

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% level.

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

Required
1. Examine the monthly overhead budget to (a) determine the costs per unit for each variable overhead item and its total per unit costs, and (b) identify the total fixed costs per month.
2. Prepare flexible overhead budgets (as in Exhibit 23.12) for October showing the amounts of each variable and fixed cost at the 65%, 75%, and 85% capacity levels.
3. Compute the direct materials cost variance, including its price and quantity variances.
4. Compute the direct labor cost variance, including its rate and efficiency variances.
5. Prepare a detailed overhead variance report (as in Exhibit 23.15) that shows the variances for individual items ofoverhead.

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Overhead Budget (75% Capacity) Variable overhead costs Indirect materials Indirect labor Power Repairs and maintenance Total variable overhead costs 45,000 180.000 45,000 ...90,000 $360,000 Fiked overhead costs 24.000 80,000 12,000 79,000 Depreciation- building... . Taxes and insurance... Supervision Total fixed overhead costs .. 195000 $555,000 Total overhead costs.... Direct materials (91,000 lbs. @ $5.10 per lb.) Direct labor (30,500 hrs. $17.25 per hr) Overhead costs $ 464,100 526,125 Indirect labor Power 177,750 .43,000 96.000 Depreciation-building ....a24,000 75,000 11,500 Depreciation -machinery.... Taxes and insurance.... 560.500 $1,550.725 Total costs..w.