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

Direct materials (4.0 Ibs. @ $5.00 per Ib.)	$	20.00
Direct labor (1.6 hrs. @ $13.00 per hr.)		20.80
Overhead (1.6 hrs. @ $18.50 per hr.)		29.60
Total standard cost	$	70.40

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		23,000
DepreciationMachinery		71,000
Taxes and insurance		17,000
Supervision		198,000
Total fixed overhead costs					309,000
Total overhead costs				$	444,000

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

Direct materials (61,500 Ibs. @ $5.20 per lb.)				$	319,800
Direct labor (23,000 hrs. @ $13.20 per hr.)					303,600
Overhead costs
Indirect materials	$	41,400
Indirect labor		176,750
Power		17,250
Repairs and maintenance		34,500
DepreciationBuilding		23,000
DepreciationMachinery		95,850
Taxes and insurance		15,300
Supervision		198,000			602,050
Total costs				$	1,225,450

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. (Indicate the effect of each variance by selecting for favorable, unfavorable, and No variance.)

4. Compute the direct labor cost variance, including its rate and efficiency variances. (Indicate the effect of each variance by selecting for favorable, unfavorable, and No variance. Round "Rate per hour" answers to two decimal places.)

5. Prepare a detailed overhead variance report that shows the variances for individual items of overhead. (Indicate the effect of each variance by selecting for favorable, unfavorable, and No variance.)

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. ANTUAN COMPANY Flexible Overhead Budgets For Month Ended October 31 Flexible Budget Flexible Budget for Variable Amount Total Fixed 65% of 75% of 85% of Cost capacity capacity capacity 13,000 15,000 17,000 per Unit Sales (in units) Variable overhead costs Indirect materials $ 1.00 15,000 17,000 13,000 65,000 Indirect labor 5.00 75,000 85,000 17,000 Power 1.00 13,000 15,000 Repairs and maintenance 2.00 26,000 30,000 34,000 $ 9.00 117,000 135,000 153,000 Fixed overhead costs 71,000 71,000 71,000 71,000 Depreciation-Building Depreciation-Machinery Taxes and insurance Supervision 71,000 71,000 71,000 71,000 Total overhead costs $ 426,000 $ 444,000 $ 462,000 3. Compute the direct materials cost variance, including its price and quantity variances. (Indicate the effect of each variance by selecting for favorable, unfavorable, and No variance.) Actual Cost Standard Cost 0 $ 0 $ 0 $ 0 0 4. Compute the direct labor cost variance, including its rate and efficiency variances. (Indicate the effect of each variance by selecting for favorable, unfavorable, and No variance. Round "Rate per hour" answers to two decimal places.) Actual Cost Standard Cost $ 0 0 $ 0 0 5. Prepare a detailed overhead variance report that shows the variances for individual items of overhead. (Indicate the effect of each variance by selecting for favorable, unfavorable, and No variance.) 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