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Antuan Company set the following standard costs per unit for its product.

Direct materials (4.0 pounds @ $4.00 per pound)$ 16.00Direct labor (1.9 hours @ $12.00 per hour)22.80Overhead (1.9 hours @ $18.50 per hour)35.15Standard cost per unit$ 73.95

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$ 15,000Indirect labor75,000Power15,000Maintenance30,000Total variable overhead costs135,000Fixed overhead costs DepreciationBuilding24,000DepreciationMachinery72,000Taxes and insurance17,000Supervisory salaries279,250Total fixed overhead costs392,250Total overhead costs$ 527,250

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

Direct materials (61,000 pounds @ $4.20 per pound) $ 256,200Direct labor (21,000 hours @ $12.40 per hour) 260,400Overhead costs Indirect materials$ 41,100 Indirect labor176,300 Power17,250 Maintenance34,500 DepreciationBuilding24,000 DepreciationMachinery97,200 Taxes and insurance15,300 Supervisory salaries279,250684,900Total costs $ 1,201,500

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.

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