Direct materials (3.0 pounds @ $4.00 per pound) Direct labor (1.9 hours @ $13.00 per hour) Overhead (1.9 hours @ $18.50 per hour) Standard cost per unit $ 12.00 24.70 35.15 $ 71.85 The standard overhead rate ($18.50 per direct labor hour) is based on a predicted activity level 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 Indirect labor $ 15,000 75,000 Power 15,000 Maintenance 30,000 Total variable overhead costs 135,000 Fixed overhead costs 25,000 71,000 18,000 278,250 392,250 $ 527,250 Depreciation-Building Depreciation-Machinery Taxes and insurance Supervisory salaries Total fixed overhead costs Total overhead costs The company incurred the following actual costs when it operated at 75% of capacity in October. Direct materials (46,000 pounds @ $4.10 per pound) Direct labor (21,000 hours @ $13.20 per hour) Overhead costs Indirect materials Indirect labor Power Maintenance Depreciation-Building Depreciation-Machinery Taxes and insurance Supervisory salaries Total costs $ 188,600 277,200 $ 41,650 176,850 17,250 34,500 25,000 95,850 16,200 278,250 685,550 $ 1,151,350 6 1. Prepare flexible overhead budgets for October showing amounts of each variable and fixed cost at the 65%, 75%, an levels. art 1 of 4 ANTUAN COMPANY Flexible Overhead Budgets For Month Ended October 31 Variable Amount Total Fixed per Unit Cost 65% ints Production (in units) Variable overhead costs Indirect materials Indirect labor Power Maintenance 15,000.00 Flexible Budget at Capacity Level of 75% 85% $ 15,000.00 $ 0 $ 0 $ 0 Fixed overhead costs Depreciation-Building Depreciation-Machinery Taxes and insurance Supervisory salaries $ 0 $ 0 $ 0 $ Total overhead costs 2. Compute the direct materials variance, including its price and quantity variances. Note: Indicate the effect of each variance by selecting favorable, unfavorable, or no variance. Actual Cost Standard Cost 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. Actual Cost Standard Cost