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

Direct materials (5.0 lbs. @ $5.00 per lb.)	$25.00
Direct labor 1.8 hrs @ $14.00 per hr.)	25.20
Overhead (1.8 hrs. @ $18.50 per hr.)	33.30
Total Standard Cost	$83.50

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	$70,000
Taxes and insurance	$16,000
Supervision	$255,500
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 (76,000 Ibs. @ $5.10 per lb.)	$387,600
Direct labor (22,000 hrs. @ $14.40 per hr.)	$316,800
Overhead costs	$41,150
Indirect materials	$176,700
Indirect labor	$17,250
Power	$34,500
Repairs and maintenance	$23,000
DepreciationBuilding	$94,500
DepreciationMachinery	$14,400
Taxes and insurance	$255,500
Supervision	$255,500
Total costs	$1,361,400

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 Oct 31

Flexible Budget

Flexible Budget for

	Variable Amount per Unit	Total Fixed Cost	65% of capacity	75% of capacity	85% of capacity
Sales (in units)
Variable overhead costs
Indirect materials
Indirect labor
Power
Repairs and maintenance
Total variable costs
Fixed overheac costs
Depreciation -- Building
Depreciation -- Machinery
Taxes and insurance
Supervision
Total fixed costs
Total overhead costs

Compute the direct materials cost variance, including its price and quantity variances.

Actual Cost		Standard Cost
Actual quantity x Actual Price	Actual quantity x Standard Price	Standard Quantity x Standard Price
? x ? Total=	? x ? Total=	? x ? Total=

Difference=

Difference =

Direct materials price variance	?	Favorable or Unfavorable
Direct materials quantity variance	?	Favorable or Unfavorable
Total direct materials variance	?	Favorable or Unfavorable

Compute the direct labor cost variance, including its rate and efficiency variances.

Actual Cost		Standard Cost
Actual hours x Actual rate	Actual hours x Standard rate	Standard hours x Standard rate
? x ? Total=	? x ? Total=	? x ? Total=

Difference=

Difference =

Direct labor rate variance	?	Favorable or Unfavorable
Direct labor efficiency variance	?	Favorable or Unfavorable
Total direct labor variance	?	Favorable or Unfavorable

Prepare a detailed overhead variance report that shows the variances for individual items of overhead.

ANTUAN COMPANY

Overhead Variance Report

For Month Ended Oct 31

Expected production volume	75%
Production level achieved	75%
Volume variance	No Variance

	Flexible Budget	Actual Results	Variances	Fav./Unfav.
Variable Costs
Indirect materials
Indirect labor
Power
Repairs and maintenance
Total Variable costs
Fixed Costs
Depreciation -- Building
Depreciation -- Machinery
Taxes and insurance
Supervision
Total fixed costs
Total overhead costs