Direct materials (3.0 pounds @ $5.00 per pound) Direct labor (1.8 hours @ $10.00 per hour) Overhead (1.8 hours @ $18.50 per hour) Standard cost per unit $ 15.00 18.00 33.30 $ 66.30 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 23,000 70,000 18,000 253,500 364,500 $ 499,500 The company incurred the following actual costs when it operated at 75% of capacity in October. $ 232,050 218,400 Direct materials (45,500 pounds @ $5.10 per pound) Direct labor (21,000 hours @ $10.40 per hour) Overhead costs Indirect materials Indirect labor Power Maintenance Depreciation-Building Depreciation-Machinery Taxes and insurance Supervisory salaries Total costs $ 41,100 176,650 17,250 34,500 23,000 94,500 16,200 253,500 656, 700 $ 1,107,150 4. Prepare a detailed overhead variance report that shows the variances for individual items of overhead. (Indicate the effect of each variance by selecting favorable, unfavorable, or no variance.) ANTUAN COMPANY Overhead Variance Report For Month Ended October 31 Answer is complete but not entirely correct. Expected production volume Production level achieved Volume Variance ANTUAN COMPANY Overhead Variance Report For Month Ended October 31 75% of capacity 75% of capacity No variance Flexible Actual Budget Results Variances Favorable/Unfavorable $ Variable overhead costs Indirect materials Indirect labor Power Maintenance 15,000 75,000 15,000 30,000 $ 41,100 176,650 17,250 34,500 $ 26,100 101,650 2,250 4,500 Unfavorable Unfavorable Unfavorable Unfavorable 135,000 269,500 134,500 Unfavorable Total variable overhead costs Fixed overhead costs DepreciationBuilding DepreciationMachinery Taxes and insurance Supervisory salaries 23,000 70,000 18,000 253,500 23,000 94,500 16,200 253,500 0 24,500 1,800 0 No variance Unfavorable Favorable No variance DO 387,200 364,500 499,500 $ 22,700 $ 157,200 Unfavorable Unfavorable $ $ 656,700 Total fixed overhead costs Total overhead costs Volume Variance Budgeted (flexible) overhead Standard overhead applied Volume variance Total overhead variance $ 135,000 $ 135,000 $ 0 No variance $ 7,777,777 X Unfavorable >