Problem 1: Antuan Company set the following standard costs for one unit of its product. Direct materials (6 lbs. @ $5 per lb.)$ 30 Direct labor (2 hrs. @ $17 per hr.) 34 Overhead (2 hrs. @ $18.50 per hr.) 37 10 Total standard cost $ 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 (75% Capacity) Variable overhead costs Indirect materials $ 45,000 Indirect labor 180,00 0 Power 45,000 Repairs and maintenance 90,000 Total variable overhead costs 360,00 $ 0 Fixed overhead costs DepreciationBuilding 24,000 Depreciation Machinery 80,000 Taxes and insurance 12,000 Supervision 79,000 195,00 Total fixed overhead costs 0 Total overhead costs 555,00 S The company incurred the following actual costs when it operated at 75% of capacity in October. Direct materials (91,000 lbs. @ $5.10 per lb.) $ 464.100 Direct labor (30,500 hrs. @ $17.25 per hr.) 526.125 Overhead costs Indirect materials $ 44,250 Indirect labor 177,75 0 Power 43,000 Repairs and maintenance 96,000 DepreciationBuilding 24,000 Depreciation Machinery 75,000 Taxes and insurance 11.500 Supervision 89,000 560,500 Total costs $1,550,725 Required: Using Excel, prepare a spreadsheet that addresses the following: a) Prepare flexible overhead budgets for October showing the amounts of each variable and fixed cost at the 75% and 85% capacity levels and classify all items listed in the fixed budget as variable or fixed. b) Compute the direct materials cost variance, including its price and quantity variances. (Indicate the effect of each variance as favorable, unfavorable, or no variance. c) Describe what you, as department manager in charge of these operations, would do with the information you have gathered in part b. Would you address each variance? Are there any that you don't think require any follow-up? Which would you prioritize and why? Write in complete sentences in proper English. Format this so the whole answer is visible without having to widen columns or rows