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

Direct materials (3.0 pounds @ $5.00 per pound)$ 15.00Direct labor (1.7 hours @ $14.00 per hour)23.80Overhead (1.7 hours @ $18.50 per hour)31.45Standard cost per unit$ 70.25

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$ 15,000Indirect labor75,000Power15,000Maintenance30,000Total variable overhead costs135,000Fixed overhead costs DepreciationBuilding24,000DepreciationMachinery70,000Taxes and insurance18,000Supervisory salaries224,750Total fixed overhead costs336,750Total overhead costs$ 471,750

The company incurred the following actual costs when it operated at 75% of capacity in October.

Direct materials (45,500 pounds @ $5.20 per pound) $ 236,600Direct labor (21,000 hours @ $14.10 per hour) 296,100Overhead costs Indirect materials$ 41,950 Indirect labor176,750 Power17,250 Maintenance34,500 DepreciationBuilding24,000 DepreciationMachinery94,500 Taxes and insurance16,200 Supervisory salaries224,750629,900Total costs $ 1,162,600

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

Note: Indicate the effect of each variance by selecting favorable, unfavorable, or no variance. Round "Rate per hour" answers to two decimal places.

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