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

Direct Materials (6 1lbs. @ $5 per lb.)..............................................$30

Direct Labor (2 hrs. @ $17 per hr.)...................................................$34

Overhead (2 hrs. @ $18.50 per hr.)..................................................$37

Total standard cost...........................................................................$101

The predetermined overhead rate ($18.50 per direct labor hr.) 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% level

Overhead Budget (75% capacity)

Variable overhead costs

Indirect materials...............................................................................$45,000

Indirect labor.......................................................................................$180,000

Power...................................................................................................$45,000

Repairs and Maintenance...................................................................$90,000

Total variable overhead costs.........................................................................................$360,000

Fixed overhead costs

Depreciation-building...........................................................................$24,000

Depreciation-machinery.......................................................................$80,000

Taxes and insurance..............................................................................$12,000

Supervision..............................................................................................$79,000

Total fixed overhead costs............................................................................................$195,000

Total overhead costs......................................................................................................$555,000

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

Overhead costs

Indirect materials...................................................$44,250

Indirect labor.........................................................$177,750

Power.....................................................................$43,000

Repairs and Maintenance.....................................$96,000

Depreciation--building.........................................$24,000

Depreciation-machinery......................................$75,000

Supervision............................................................$89,000

$560,500

Total costs..................................................................................$1,550,725

Required:

1. Examine the monthly overhead budget to (a) determine the costs per unit for each variable overhead item and its total per units costs, and (b) identify the total fixed costs per month.

2. Prepare a flexible overhead budgets for October. Showing the amounts of each variable and fixed cost at the 65%, 75%, and 85% capacity levels.