Required information

Problem 08-3A Flexible budget preparation; computation of materials, labor, and overhead variances; and overhead variance report LO P1, P2, P3, P4

[The following information applies to the questions displayed below.] Antuan Company set the following standard costs for one unit of its product.

Direct materials (4.0 Ibs. @ $6.00 per Ib.)	$	24.00
Direct labor (1.8 hrs. @ $12.00 per hr.)		21.60
Overhead (1.8 hrs. @ $18.50 per hr.)		33.30
Total standard cost	$	78.90

The predetermined overhead rate ($18.50 per direct labor hour) is based on an expected volume of 75% of the factorys capacity of 20,000 units per month. Following are the companys 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		15,000
Repairs and maintenance		30,000
Total variable overhead costs				$	135,000
Fixed overhead costs
DepreciationBuilding		24,000
DepreciationMachinery		72,000
Taxes and insurance		18,000
Supervision		250,500
Total fixed overhead costs					364,500
Total overhead costs				$	499,500

The company incurred the following actual costs when it operated at 75% of capacity in October.

Direct materials (61,000 Ibs. @ $6.10 per lb.)				$	372,100
Direct labor (19,000 hrs. @ $12.30 per hr.)					233,700
Overhead costs
Indirect materials	$	41,400
Indirect labor		176,950
Power		17,250
Repairs and maintenance		34,500
DepreciationBuilding		24,000
DepreciationMachinery		97,200
Taxes and insurance		16,200
Supervision		250,500			658,000
Total costs				$	1,263,800

rev: 04_27_2020_QC_CS-209738

Problem 08-3A Part 1&2

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.