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Required information Skip to question [The following information applies to the questions displayed below.] Antuan Company set the following standard costs per unit for its

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

Direct materials (6 pounds @ $5 per pound) $ 30
Direct labor (2 hours @ $17 per hour) 34
Overhead (2 hours @ $18.50 per hour) 37
Standard cost per unit $ 101

The standard overhead rate ($18.50 per direct labor hour) is based on a predicted activity level 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
Maintenance 90,000
Total variable overhead costs 360,000
Fixed overhead costs
DepreciationBuilding 24,000
DepreciationMachinery 80,000
Taxes and insurance 12,000
Supervisory salaries 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 pounds @ $5.10 per pound) $ 464,100
Direct labor (30,500 hours @ $17.25 per hour) 526,125
Overhead costs
Indirect materials $ 44,250
Indirect labor 177,750
Power 43,000
Maintenance 96,000
DepreciationBuilding 24,000
DepreciationMachinery 75,000
Taxes and insurance 11,500
Supervisory salaries 89,000 560,500
Total costs $ 1,550,725

2. Compute the direct materials variance, including its price and quantity variances. (Indicate the effect of each variance by selecting favorable, unfavorable, or no variance.)

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