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

Direct materials (3.0 Ibs. @ $5.00 per Ib.)	$	15.00
Direct labor (1.6 hrs. @ $12.00 per hr.)		19.20
Overhead (1.6 hrs. @ $18.50 per hr.)		29.60
Total standard cost	$	63.80

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		18,000
Supervision		196,000
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 (46,000 Ibs. @ $5.10 per lb.)				$	234,600
Direct labor (28,000 hrs. @ $12.20 per hr.)					341,600
Overhead costs
Indirect materials	$	41,800
Indirect labor		176,600
Power		17,250
Repairs and maintenance		34,500
DepreciationBuilding		24,000
DepreciationMachinery		95,850
Taxes and insurance		16,200
Supervision		196,000			602,200
Total costs				$	1,178,400

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.