Antuan Company set the following standard costs for one unit of its product. Direct materials (5.0 Ibs. @ $5.00 per $25.00 Ib.) Direct labor (1.6 hrs. @ $14.00 per hr.) 22.40 Overhead (1.6 hrs. @ $18.50 per hr.) 29.60 Total standard cost $77.00 The predetermined overhead rate ($18.50 per direct labor hour) is based on an expected volume 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. $135,000 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 Fixed overhead costs Depreciation-Building 25,000 Depreciation-Machinery 71,000 Taxes and insurance 16,000 Supervision 197,000 Total fixed overhead costs Total overhead costs 309,000 $444,000 The company incurred the following actual costs when it operated at 75% of capacity in October. $ 397,800 314,600 Direct materials (76,500 Ibs. @ $5.20 per lb.) Direct labor (22,000 hrs. @ $14.30 per hr.) Overhead costs Indirect materials $ 41,150 Indirect labor 176,850 Power 17,250 Repairs and maintenance 34,500 Depreciation-Building 25,000 Depreciation-Machinery 95,850 Taxes and insurance 14,400 Supervision 197,000 Total costs 602,000 $1,314,400 4. Compute the direct labor cost variance, including its rate and efficiency variances. Actual Cost X Standard Cost X AH AR X SR SH SR AH 22,000 22,000 14.30 X $14.00 $ 14.00 $ 314,600 $ 308,000 $ 6,600 $ 0 $ 6,600 Unfavorable Direct labor rate variance Direct labor efficiency variance 0