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 (1.8 hrs. @ $10.00 per hr.)		18.00
Overhead (1.8 hrs. @ $18.50 per hr.)		33.30
Total standard cost	$	63.30

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		24,000
Depreciationmachinery		71,000
Taxes and insurance		17,000
Supervision		252,500
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 (46,000 Ibs. @ $4.20 per lb.)				$	193,200
Direct labor (28,000 hrs. @ $10.20 per hr.)					285,600
Overhead costs
Indirect materials	$	41,950
Indirect labor		176,150
Power		17,250
Repairs and maintenance		34,500
Depreciationbuilding		24,000
Depreciationmachinery		95,850
Taxes and insurance		15,300
Supervision		252,500			657,500
Total costs				$	1,136,300

References Section BreakProblem 23-3A Flexible budget preparation; computation of materials, labor, and overhead variances; and overhead variance report LO P1, P2, P3, C2