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

Direct materials (4.0 Ibs. @ $5.00 per Ib.)	$	20.00
Direct labor (1.8 hrs. @ $12.00 per hr.)		21.60
Overhead (1.8 hrs. @ $18.50 per hr.)		33.30
Total standard cost	$	74.90

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		23,000
DepreciationMachinery		70,000
Taxes and insurance		16,000
Supervision		255,500
Total fixed overhead costs					364,500
Total overhead costs				$	499,500

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

Direct materials (60,500 Ibs. @ $5.10 per lb.)				$	308,550
Direct labor (21,000 hrs. @ $12.10 per hr.)					254,100
Overhead costs
Indirect materials	$	41,200
Indirect labor		176,250
Power		17,250
Repairs and maintenance		34,500
DepreciationBuilding		23,000
DepreciationMachinery		94,500
Taxes and insurance		14,400
Supervision		255,500			656,600
Total costs				$	1,219,250

rev: 03_28_2018_QC_CS-122864

3. Compute the direct materials cost variance, including its price and quantity variances. AQ = Actual Quantity SQ = Standard Quantity AP = Actual Price SP = Standard Price

Actual Cost AQ L X 60,500 X SQ AP $ 5.10 AQ 1 60,500 x X I SP $ Standard Cost X SP X $ 5.00 5.00 $ 308,550 302,500 $ 6,050 $ 0 Direct materials price variance Direct materials quantity variance Total direct materials variance $ 6,050 o Unfavorable Unfavorable Unfavorable