Direct materials (3.0 pounds @ $5.00 per pound) Direct labor (1.8 hours @ $14.00 per hour) Overhead (1.8 hours @ $18.50 per hour) Standard cost per unit $ 15.00 25.20 33.30 $ 73.50 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. $ 15,000 75,000 15,000 30,000 135,000 Overhead Budget (75% Capacity) Variable overhead costs Indirect materials Indirect labor Power Maintenance Total variable overhead costs Fixed overhead costs Depreciation-Building Depreciation-Machinery Taxes and insurance Supervisory salaries Total fixed overhead costs Total overhead costs 24,000 71,000 17,000 252,500 364,500 $ 499,500 The company incurred the following actual costs when it operated at 75% of capacity in October. $ 232,050 314,600 Direct materials (45,500 pounds @ $5.10 per pound) Direct labor (22,000 hours @ $14.30 per hour) Overhead costs Indirect materials Indirect labor Power Maintenance Depreciation-Building Depreciation-Machinery Taxes and insurance Supervisory salaries Total costs $ 41,300 176,050 17,250 34,500 24,000 95,850 15,300 252,500 656, 750 $ 1,203,400 For Month Ended October 31 Expected production volume Production level achieved Volume Variance Flexible Budget Actual Results Variances Favorable/Unfavorable Variable overhead costs Fixed overhead costs Total overhead costs Volume Variance $ 0 Volume variance Total overhead variance