Antuan Company set the following standard costs for one unit of its product. Direct materials (5.0 Ibs. @ $5.00 per Ib.) Direct labor (1.8 hrs. @ $11.00 per hr.) Overhead (1.8 hrs. @ $18.50 per hr.) Total standard cost $25.00 19.80 33.30 $78.10 The predetermined overhead rate ($18.50 per direct labor hour) 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% 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 Fixed overhead costs Depreciation-Building 25,000 Depreciation-Machinery 70,000 Taxes and insurance 16,000 Supervision 253,500 Total fixed overhead costs Total overhead costs $135,000 364,500 $499,500 The company incurred the following actual costs when it operated at 75% of capacity in October. $ 385,050 262,200 Direct materials (75,500 Ibs. @ $5.10 per lb.) Direct labor (23,000 hrs. @ $11.40 per hr.) Overhead costs Indirect materials Indirect labor Power Repairs and maintenance Depreciation-Building Depreciation-Machinery Taxes and insurance Supervision Total costs $ 41,550 176,650 17,250 34,500 25,000 94,500 14,400 253,500 657,350 $1,304,600 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 AQ 75,500 AP SQ AQ 75,500 X X SP $ 5.00 Standard Cost X SP X $ 5.00 377,500 $ 0 $ Direct materials price variance Direct materials quantity variance Total direct materials variance 0 01