Antuan Company set the following standard costs for one unit of its product. Direct materials (3.0 Ibs. @ $5.00 per Ib.) Direct labor (1.6 hrs. @ $14.00 per hr.) Overhead (1.6 hrs. @ $18.50 per hr.) Total standard cost $15.00 22.40 29.60 $67.00 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 23,000 Depreciation-Machinery 72,000 Taxes and insurance 16,000 Supervision 198,000 Total fixed overhead costs Total overhead costs $135,000 309,000 $444,000 The company incurred the following actual costs when it operated at 75% of capacity in October. es 241,800 269,800 Direct materials (46,500 Ibs. @ $5.20 per lb.) Direct labor (19,000 hrs. @ $14.20 per hr.) Overhead costs Indirect materials Indirect labor Power Repairs and maintenance Depreciation-Building Depreciation-Machinery Taxes and insurance Supervision Total costs $ 41,750 176,050 17,250 34,500 23,000 97,200 14,400 198,000 602 , 150 $1,113,750 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. ANTUAN COMPANY Flexible Overhead Budgets For Month Ended October 31 Flexible Budget Flexible Budget for Variable Amount per Total Fixed 65% of 75% of 85% of Cost Unit capacity capacity capacity Sales (in units) Variable overhead costs Indirect materials Indirect labor Power Repairs and maintenance Total variable costs $ 0.00 0 0 0 Fixed overhead costs DepreciationBuilding DepreciationMachinery Taxes and insurance Supervision Total fixed costs 0 0 0 0 Total overhead costs 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 Actual quantity X Actual price Actual quantity X Standard price Standard quantity Standard price 0 $ 0 $ 0 $ 0 Unfavorable Direct materials price variance Direct materials quantity variance Total direct materials variance 0 Unfavorable Unfavorable 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 Actual hours X Actual rate Actual hours Standard rate Standard hours Standard rate $ 0 $ 0 $ 0 Unfavorable Direct labor rate variance Direct labor efficiency variance Total direct labor variance 0 Favorable Favorable 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 75% of capacity Production level achieved 75% of capacity Volume variance No variance Actual Flexible Budget Results Variances Fav. / Unfav. Variable costs Indirect materials Indirect labor Unfavorable Unfavorable Unfavorable Unfavorable Power Repairs and maintenance Total variable costs Unfavorable Fixed costs No variance Unfavorable DepreciationBuilding DepreciationMachinery Taxes and insurance Supervision Favorable No variance Total fixed costs Unfavorable Total overhead costs Unfavorable