1&2. Prepare flexible overhead budgets for October showing the amounts of each variable and fixed cost at the 65%, 75%, and 85% capacity levels and classify all items listed in the fixed budget as variable or fixed.
3. Compute the direct materials cost variance, including its price and quantity variances. (Indicate the effect of each variance by selecting for favorable, unfavorable, and No variance.)
4. Compute the direct labor cost variance, including its rate and efficiency variances. (Indicate the effect of each variance by selecting for favorable, unfavorable, and No variance. Round "Rate per hour" answers to two decimal places.)
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.) 
Antuan Company set the following standard costs for one unit of its product. Direct materials (4.0 Ibs. @ $5.00 per Ib.) Direct labor (2.0 hrs. @ $11.00 per hr.) Overhead (2.0 hrs. @ $18.50 per hr.) Total standard cost $20.00 22.00 37.00 $79.00 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 Fixed overhead costs Depreciation-Building 24,000 DepreciationMachinery 71,000 Taxes and insurance 18,000 Supervision 307,000 Total fixed overhead costs Total overhead costs $135,000 420,000 $555,000 The company incurred the following actual costs when it operated at 75% of capacity in October. $ 319,800 228,000 Direct materials (61,500 Ibs. @ $5.20 per lb.) Direct labor (20,000 hrs. @ $11.40 per hr.) Overhead costs Indirect materials Indirect labor Power Repairs and maintenance Depreciation-Building DepreciationMachinery Taxes and insurance Supervision Total costs $ 41,500 176,600 17,250 34,500 24,000 95,850 16,200 307,000 712,900 $1,260,700 Required: 1&2. Prepare flexible overhead budgets for October showing the amounts of each variable and fixed cost at the 65%, 75%, and 85% capacity levels and classify all items listed in the fixed budget as variable or fixed. ANTUAN COMPANY Flexible Overhead Budgets For Month Ended October 31 Flexible Budget Flexible Budget for Variable Amount Total Fixed 65% of 75% of 85% of per Unit Cost capacity capacity capacity Sales (in units) Variable overhead costs Indirect materials X This is a numeric cell, so please enter numbers only. Indirect labor Power Repairs and maintenance Total variable costs $ 0.00 0 0 0 Fixed overhead costs Depreciation Building Depreciation Machinery Taxes and insurance Total fixed costs 0 0 0 0 Total overhead costs 3. Compute the direct materials cost variance, including its price and quantity variances. (Indicate the effect of each variance by selecting for favorable, unfavorable, and No variance.) Actual Cost Standard Cost 4. Compute the direct labor cost variance, including its rate and efficiency variances. (Indicate the effect of each variance by selecting for favorable, unfavorable, and No variance. Round "Rate per hour" answers to two decimal places.) Actual Cost Standard Cost 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.) ANTUAN COMPANY Overhead Variance Report For Month Ended October 31 Expected production volume Production level achieved Volume variance Flexible Budget Actual Results Variances Fav. / Unfav. Variable costs Fixed costs Total overhead costs
