Direct materials (4.0 pounds @ $5.00 per pound) $20.00 Direct labor ( 1.6 hours a $12.00 per hour) Overhead ( 1.6 hours @ $18.50 per hour) Standard cost per unit 19.2029.60$68.80 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 $15,000 Indirect labor 75,000 Power Maintenance Total variable overhead costs 15,000 Fixed overhead costs Depreciation-Building Depreciation-Machinery Taxes and insurance Supervisory salaries Total fixed overhead costs Total overhead costs 75,00015,00030,000135,000 24,00071,00017,000197,000309,000$444,000 The company incurred the following actual costs when it operated at 75% of capacity in October. Required: 1. Prepare flexible overhead budgets for October showing amounts of each variable and fixed cost at the 65%,75%, and 85% capacity levels. 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. \begin{tabular}{|l|l|l|l|l|} \hline & & & \\ \hline Volume variance & & & & \\ \hline Total overhead variance & & & & \\ \hline \end{tabular} 4. Prepare a detailed overhead variance report that shows the variances for individual items of overhead. Note: Indicate the effect of each variance by selecting favorable, unfavorable, or no variance. 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