18.70 Required information Problem 8-3A (Algo) Flexible overhead budget; materials, labor, and overhead variances; and overhead variance report LO P1, P2, P3, P4 [The following information applies to the questions displayed below.) Antuan Company set the following standard costs per unit for its product. Direct materials (5.0 pounds & $4.00 per pound) $ 20.00 Direct labor (1.7 hours $11.00 per hour) Overhead (1.7 hours e $18.50 per hour) 31.45 Standard cost per unit $.70.15 The standard overhead rate ($18.50 per direct labor hour) is based on a predicted activity level 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 (758 Capacity) Variable overhead conta Indirect materials $ 15,000 Indirect labor 75,000 Power 15,000 Maintenance 30,000 Total variable overhead costs 135,000 Fixed overhead costs Depreciation-Building 24,000 Depreciation-Machinery 72,000 Taxes and insurance 18,000 Supervisory salaries 222,750 Total fixed overhead costs 336, 750 Overhead Budget (758 Capacity) Variable overhead costs Indirect materials Indirect labor Power Maintenance Total variable overhead costs Fixed overhead costs Depreciation-Building Depreciation-Machinery Taxes and insurance Supervisory salaries Total fixed overhead costs Total overhead costs $ 15,000 75,000 15,000 30,000 135,000 24,000 72,000 18,000 222,750 336,750 $ 471,750 The company incurred the following actual costs when it operated at 75% of capacity in October $ 309,550 244,200 Direct materials (75,500 pounds @ $4.10 per pound) Direct labor (22,000 hours $11.10 per hour) Overhead costs Indirect materials Indirect labor Power Maintenance Depreciation-Building Depreciation-Machinery Taxes and insurance Supervisory salaries Total costs $ 41,300 176,800 17,250 34,500 24,000 97,200 16,200 222,750 630.000 $ 1,183,750 Problem 8-3A (Algo) Part 1 1. Prepare flexible overhead budgets for October showing amounts of each variable and fixed cost at the 65%, 75%, and 85% capacity levels ANTUAN COMPANY Flexible Overhead Budgets Variablo Amount Total Fixed Flexible Budget at Capacity Level of per Unit Cost 65% 75% 85% For Month Ended October 31 Production (in units) Variable overhead costs Fixed overhead costs 2. Compute the direct materials variance, including its price and quantity variances. (Indicate the effect of each variance by selecting favorable, unfavorable, or no variance.) Actual Cost Stand 3. Compute the direct labor variance, including its rate and efficiency variances, (Indicate the effect of each variance by selecting favorable, unfavorable, or no variance. Round "Rate per hour" answers to two decimal places.) Actual Cost Sta 4. Prepare a detailed overhead variance report that shows the variances for individual items of overhead. (Indi variance by selecting favorable, unfavorable, or 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 Favorable/Unfavorable Variable overhead costs Fixed overhead costs Required information Fixed overhead costs Total overhead costs Volume Variance Volume variance Total overhead variance