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

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.

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

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.

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.

Direct materials (4.0 lbs. @ $5.00 per lb. Direct labor (1.9 hrs. $11.00 per hr.) Overhead (1.9 hrs. $18.50 per hr) $20.00 20.90 35.15 Total standard cost 76.05