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Antuan Company set the following standard costs for one unit of its product. Direct materials (4.0 Ibs. @ $4.00 per Ib.) $ 16.00 Direct labor

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

Direct materials (4.0 Ibs. @ $4.00 per Ib.) $ 16.00
Direct labor (2.0 hrs. @ $11.00 per hr.) 22.00
Overhead (2.0 hrs. @ $18.50 per hr.) 37.00
Total standard cost $ 75.00

The predetermined overhead rate ($18.50 per direct labor hour) is based on an expected volume 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.

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
Depreciationbuilding 25,000
Depreciationmachinery 72,000
Taxes and insurance 18,000
Supervision 305,000
Total fixed overhead costs 420,000
Total overhead costs $ 555,000

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

Direct materials (61,000 Ibs. @ $4.20 per lb.) $ 256,200
Direct labor (29,000 hrs. @ $11.10 per hr.) 321,900
Overhead costs
Indirect materials $ 41,500
Indirect labor 176,350
Power 17,250
Repairs and maintenance 34,500
Depreciationbuilding 25,000
Depreciationmachinery 97,200
Taxes and insurance 16,200
Supervision 305,000 713,000
Total costs $ 1,291,100

Required:

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.

7.

value: 15.00 points

Required information

3.

Compute the direct materials cost variance, including its price and quantity variances.

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