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

Direct materials (3.0 Ibs. @ $4.00 per Ib.)	$	12.00
Direct labor (1.9 hrs. @ $12.00 per hr.)		22.80
Overhead (1.9 hrs. @ $18.50 per hr.)		35.15
Total standard cost	$	69.95

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		71,000
Taxes and insurance		17,000
Supervision		281,250
Total fixed overhead costs					392,250
Total overhead costs				$	527,250

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

Direct materials (46,000 Ibs. @ $4.10 per lb.)				$	188,600
Direct labor (23,000 hrs. @ $12.20 per hr.)					280,600
Overhead costs
Indirect materials	$	41,500
Indirect labor		176,050
Power		17,250
Repairs and maintenance		34,500
DepreciationBuilding		23,000
DepreciationMachinery		95,850
Taxes and insurance		15,300
Supervision		281,250			684,700
Total costs				$	1,153,900

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. AQ = Actual Quantity SQ = Standard Quantity AP = Actual Price SP = Standard Price 4. Compute the direct labor cost variance, including its rate and efficiency variances. AH = Actual Hours SH = Standard Hours AR = Actual Rate SR = Standard Rate

5. Prepare a detailed overhead variance report that shows the variances for individual items of overhead.