.

Required: 1&2. Prepare flexible overhead budgets for October showing the amounts of each variable and fixed cost at the 65%, 75%, and 85% capacity levels and classify all items listed in the fixed budget as variable or fixed.

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.)

4. Compute the direct labor cost variance, including its rate and efficiency variances. (Indicate the effect of each variance by selecting for favorable, unfavorable, and No variance. Round "Rate per hour" answers to two decimal places.)

5. Prepare a detailed overhead variance report that shows the variances for individual items of overhead. (Indicate the effect of each variance by selecting for favorable, unfavorable, and No variance.)

Antuan Company set the following standard costs for one unit of its product. Direct materials (4.8 lbs. @ $6.ee per 1b.) Direct labor (1.7 hrs. @ $13.00 per hr.) Overhead (1.7 hrs. @ $18.5e per hr.) Total standard cost $24.ee 22.10 31.45 $77.55 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. $135,888 Overhead Budget (75% Capacity) Variable overhead costs Indirect materials $ 15,000 Indirect labor 75, eee Power 15, see Repairs and maintenance 3e, we Total variable overhead costs Fixed overhead costs Depreciation-Building 23,000 Depreciation-Machinery 7e, eee Taxes and insurance 17, see Supervision 226,750 Total fixed overhead costs Total overhead costs 336,750 $471,750 The company Incurred the following actual costs when it operated at 75% of capacity in October S 381, 3ee 288, 289 Direct materials (61,50e Ibs. $6.2e per 1b.) Direct labor (22,eee hrs. @ $13.10 per hr.) Overhead costs Indirect materials Indirect labor Power Repairs and maintenance Depreciation-Building Depreciation-Machinery Taxes and insurance Supervision Total costs $ 41,250 176,680 17, 252 34,500 23,00 94,500 15,380 226,750 629,150 $1,298,650 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 S 0.00 0 Fixed overhead costs Actual Cost Standard Cos 0 $ 0 $ 0 oc Actual Cost Standard $ 0 S 0 $ 0 0 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