Required information Problem 8-3A (Algo) Flexible overhead budget; 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 per unit for its product. Direct materials (3.0 pounds @ $4.00 per pound) Direct labor (2.0 hours @ $11.00 per hour) Overhead (2.0 hours $18.50 per hour) Standard cost per unit $ 12.00 22.00 37.00 $ 71.00 The standard overhead rate ($18.50 per direct labor hour) is based on a predicted activity level 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 Indirect labor Power Maintenance Total variable overhead costs. Fixed overhead costs Depreciation-Building Depreciation-Machinery Taxes and insurance Supervisory salaries. Total fixed overhead costs. Total overhead costs $ 15,000 75,000 15,000 30,000 135,000 25,000 70,000 17,000 308,000 420,000 $ 555,000 The company incurred the following actual costs when it operated at 75% of capacity in October. Direct materials (46,000 pounds $4.20 per pound) Direct labor (20,000 hours @ $11.10 per hour) Overhead costs Indirect materials Indirect labor $ 41,950 176,750 $ 193,200 222,000 Overhead Budget (758 Capacity) Variable overhead costs Indirect materials Indirect labor Power $ 15,000 75,000 15,000 Maintenance 30,000 Total variable overhead costs 135,000 Fixed overhead costs Depreciation-Building Depreciation-Machinery 25,000 70,000 Taxes and insurance Supervisory salaries 17,000 308,000 420,000 $ 555,000 Total fixed overhead costs Total overhead costs The company incurred the following actual costs when it operated at 75% of capacity in October. Direct materials (46,000 pounds $4.20 per pound) Direct labor (20,000 hours $11.10 per hour) Overhead costs Indirect materials Indirect labor Power Maintenance Depreciation-Building Depreciation-Machinery Taxes and insurance. Supervisory salaries Total costs $ 193,200 222,000 $ 41,950 176,750 17,250 34,500 25,000. 94,500 15,300 308,000 713,250 $ 1,128,450 Required: 1. Prepare flexible overhead budgets for October showing amounts of each variable and fixed cost at the 65%, 75%, and 85% capacity levels. Flexible Budget at Capacity Level of ANTUAN COMPANY Flexible Overhead Budgets For Month Ended October 31 Variable Amount Total Fixed per Unit Cost 65% Production (in units) Variable overhead costs Indirect materials Indirect labor Power Maintenance Fixed overhead costs Depreciation-Building Depreciation-Machinery Taxes and insurance Supervisory salaries 75% $ 0.00 $ 0 $ 0 $ 85% Total fixed overhead $ 0 $ 0 $ 0 $ 0 Total overhead costs 2. Compute the direct materials variance, including its price and quantity variances. Note: Indicate the effect of each variance by selecting favorable, unfavorable, or no variance. Actual Cost Standard Cost Problem 8-3A (Algo) Part 3 3. Compute the direct labor variance, including its rate and efficiency variances. Note: Indicate the effect of each variance by selecting favorable, unfavorable, or no variance. Round "Rate per hour" answers to two decimal places. Actual Cost Standard Cost 4. Prepare a detailed overhead variance report that shows the variances for individual items of overhead. Note: Indicate the effect of each variance by selecting favorable, unfavorable, or no variance. Expected production volume Production level achieved Volume Variance ANTUAN COMPANY Overhead Variance Report For Month Ended October 31 Flexible Budget Actual Results Variances Favorable or Unfavorable Variable overhead costs Fixed overhead costs Total overhead costs Volume Variance +