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Problem 21-3A Flexible budget preparation; computation of materials, labor, and overhead variances; and overhead variance report LO P1, P2, P3, P4

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[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. @ $5.00 per Ib.)	$	20.00
Direct labor (1.8 hrs. @ $13.00 per hr.)		23.40
Overhead (1.8 hrs. @ $18.50 per hr.)		33.30
Total standard cost	$	76.70

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		71,000
Taxes and insurance		16,000
Supervision		253,500
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. @ $5.10 per lb.)				$	311,100
Direct labor (22,000 hrs. @ $13.20 per hr.)					290,400
Overhead costs
Indirect materials	$	41,900
Indirect labor		176,350
Power		17,250
Repairs and maintenance		34,500
DepreciationBuilding		24,000
DepreciationMachinery		95,850
Taxes and insurance		14,400
Supervision		253,500			657,750
Total costs				$	1,259,250

rev: 04_27_2020_QC_CS-209738

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.

Problem 21-3A Part 3

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.)

Problem 21-3A Part 4

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.)

Problem 21-3A Part 5

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.)