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

Direct materials (3.0 Ibs. @ $6.00 per Ib.) $ 18.00

Direct labor (1.6 hrs. @ $14.00 per hr.) 22.40

Overhead (1.6 hrs. @ $18.50 per hr.) 29.60

Total standard cost $ 70.00

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 $ 30,000

Indirect labor 75,000

Power

30,000

Repairs and maintenance 30,000

Total variable overhead costs $ 165,000

Fixed overhead costs

DepreciationBuilding 24,000

DepreciationMachinery 71,000

Taxes and insurance 17,000

Supervision 167,000

Total fixed overhead costs 279,000

Total overhead costs $ 444,000

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

Direct materials (46,000 Ibs. @ $6.20 per lb.) $ 285,200

Direct labor (23,000 hrs. @ $14.20 per hr.) 326,600

Overhead costs

Indirect materials $ 41,850

Indirect labor 176,150

Power 34,500

Repairs and maintenance 34,500

DepreciationBuilding 24,000

DepreciationMachinery 95,850

Taxes and insurance 15,300

Supervision 167,000 589,150

Total costs $ 1,200,950

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 Standard Cost $ 0