Lory SC HIMOIU LUSUS VCS PIVUULL Direct materials (5.2 lbs. $5.00 per Ib.) Direct labor (1.9 hrs. $13.00 per hr.) Overhead (1.9 hrs. $18.50 per hr.) Total standard cost $25.00 24.70 35.15 $84.85 The predetermined overhead rate ($18.50 per direct labor hour) is based on an expected volume 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 (25% Capacity) Variable overhead costs Indirect materials $ 15,000 Indirect labor 75,000 Power 15,000 Repairs and maintenance 30.000 Total variable overhead costs Fixed overhead costs $135,000 Depreciation-Building 24,000 Depreciation-Machinery 71,000 Taxes and insurance 17,000 Supervision 280,250 Total fixed overhead costs 392,250 Total overhead costs $527,250 The company incurred the following actual costs when it operated at 75% of capacity in October 5 387,600 250, 800 Direct materials (76,000 lbs. @ $5.10 per lb.) Direct labor (19,000 hrs. $13.20 per hr.) Overhead costs Indirect materials Indirect labor Power Repairs and maintenance Depreciation-Building Depreciation Machinery Taxes and insurance Supervision Total costs $ 41,550 176,750 17,250 34,500 24,000 95,850 15,300 280, 250 685,450 $1,323,850 uuuylus IIULIUDEI SUWilly the amounts of each variable and fixed cost at th capacity levels and classify all items listed in the fixed budget as variable or fixed. ANTUAN COMPANY Flexible Overhead Budgets For Month Ended October 31 Flexible Budget Flexible Budget for Variable Amount Total Fixed 65% of 75% of 85% of Cost capacity capacity capacity per Unit Sales (in units) Variable overhead costs $ 0.00 0 Fixed overhead costs 0 0 0 Total overhead costs 3. Compute the direct materials cost variance, including its price and quantity variances. (Indicate the effect of each variance by selecting for favorable, unfavorable, and No variance.) Standard Actu Co 5. Prepare a detailed overhead variance report that shows the variances for individual items of overhead. ( variance by selecting for favorable, unfavorable, and No variance.) ANTUAN COMPANY Overhead Variance Report For Month Ended October 31 Expected production volume Production level achieved Volume variance Flexible Budget Actual Results Variances Fav. / Unfav. Variable costs Fixed costs Total overhead costs