Required information Problem 21-3A Flexible budget preparation; computation of materials, labor, and overhead variances; and overhead variance report LO P1, P2, P3, C2 [The following information applies to the questions displayed below.] Antuan Company set the following standard costs for one unit of its product. Direct materials (6 Ibs. @ $5 per Ib.) $ 30 Direct labor (2 hrs. @ $17 per hr.) 34 Overhead (2 hrs. @ $18.50 per hr.) 37 Total standard cost $ 101 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 $ 45,000 Indirect labor 180,000 Power 45,000 Repairs and maintenance 90,000 Total variable overhead costs $ 360,000 Fixed overhead costs DepreciationBuilding 24,000 DepreciationMachinery 80,000 Taxes and insurance 12,000 Supervision 79,000 Total fixed overhead costs 195,000 Total overhead costs $ 555,000 The company incurred the following actual costs when it operated at 75% of capacity in October. Direct materials (91,000 Ibs. @ $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 177,750 Power 43,000 Repairs and maintenance 96,000 DepreciationBuilding 24,000 DepreciationMachinery 75,000 Taxes and insurance 11,500 Supervision 89,000 560,500 Total costs $ 1,550,725 Problem 21-3A 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.