Antuan Company set the following standard costs per unit for its product. Direct materials (3.0 pounds @ $5.00 per pound) $ 15.00 Direct labor (1.7 hours @ $13.00 per hour) 22.10 Overhead (1.7 hours @ $18.50 per hour) 31.45 Standard cost per unit $ 68.55

The standard overhead rate ($18.50 per direct labor hour) is based on a predicted activity level 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 Maintenance 30,000 Total variable overhead costs 135,000 Fixed overhead costs DepreciationBuilding 24,000 DepreciationMachinery 71,000 Taxes and insurance 18,000 Supervisory salaries 223,750 Total fixed overhead costs 336,750 Total overhead costs $ 471,750

The company incurred the following actual costs when it operated at 75% of capacity in October. Direct materials (46,500 pounds @ $5.20 per pound) $ 241,800 Direct labor (21,000 hours @ $13.30 per hour) 279,300 Overhead costs Indirect materials $ 42,000 Indirect labor 176,300 Power 17,250 Maintenance 34,500 DepreciationBuilding 24,000 DepreciationMachinery 95,850 Taxes and insurance 16,200 Supervisory salaries 223,750 629,850 Total costs $ 1,150,950

2. Compute the direct materials variance, including its price and quantity variances. (Indicate the effect of each variance by selecting favorable, unfavorable, or no variance.)