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 (1.7 hrs. @ $13.00 per hr.)		22.10
Overhead (1.7 hrs. @ $18.50 per hr.)		31.45
Total standard cost	$	71.55

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		25,000
DepreciationMachinery		71,000
Taxes and insurance		17,000
Supervision		223,750
Total fixed overhead costs					336,750
Total overhead costs				$	471,750

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

Direct materials (46,000 Ibs. @ $6.10 per lb.)				$	280,600
Direct labor (21,000 hrs. @ $13.40 per hr.)					281,400
Overhead costs
Indirect materials	$	41,950
Indirect labor		176,150
Power		17,250
Repairs and maintenance		34,500
DepreciationBuilding		25,000
DepreciationMachinery		95,850
Taxes and insurance		15,300
Supervision		223,750			629,750
Total costs				$	1,191,750

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. 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.

ANTUAN COMPANY Flexible Overhead Budgets For Month Ended October 31 Flexible Budget Variable Amount Total Fixed 65% of Cost capacity Flexible Budget for 75% of capacity 85% of capacity per Unit Sales (in units) Variable overhead costs $ 0.00 0 0 Fixed overhead costs 0 0 0 0 Total overhead costs Actual Cost Standard Cost 0 $ 0 $ 0 $ 0 0 Actual Cost Standard Cost ANTUAN COMPANY Overhead Variance Report For Month Ended October 31 Expected production volume Production level achieved Volume variance Flexible Budget Actual Results Variances Fav. / Unfav. Variable costs Fixed costs Total overhead costs