Required information [The following information applies to the questions displayed below.] Antuan Company set the following standard costs per unit for its product. Direct materials (4.0 pounds $5.00 per pound) Direct labor (1.6 hours $12.00 per hour) Overhead (1.6 hours $18.50 per hour) Standard cost per unit $ 20.00 19.20 29.60 $ 68.80 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 $ 15,000 75,000 Power 15,000 Maintenance 30,000 Total variable overhead costs 135,000 Fixed overhead costs 25,000 71,000 Taxes and insurance Supervisory salaries 17,000 196,000 309,000 $ 444,000 Depreciation-Building Depreciation Machinery 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 (61,000 pounds $5.20 per pound) Direct labor (21,000 hours $12.20 per hour) Overhead costs Indirect materials Indirect labor Power Maintenance Depreciation Building Depreciation Machinery Taxes and insurance Supervisory salaries Total costs $ 317,200 256,200 $ 41,900 176,500 17,250 34,500 25,000 95,850 15,300 196,000 602,300 $ 1,175,700 Required: 1. Prepare flexible overhead budgets for October showing amounts of each variable and fixed cost at the 65%, 75%, and 85% capacity levels. Answer is not complete. ANTUAN COMPANY Flexible Overhead Budgets For Month Ended October 31 Variable Amount per Unit Flexible Budget at Capacity Level of Total Fixed Cost 65% 75% 85% Production (in units) 12,000 x 15,000 17,000 Variable overhead costs Indirect materials S 1.00 $13,000 $15,000 $17,000 Indirect labor 5.00 65,000 75,000 Power 1.00 13,000 Maintenance 2.00 26,000 15,000 30,000 85,000 17,000 34,000 9.00 Fixed overhead costs Depreciation-Building Depreciation-Machinery Taxes and insurance Supervisory salaries $117,000 $ 135,000 $ 153,000 $ 23,000 $ 23,000 $ 23,000 70,000 17,000 199,000 70,000 x 17,000 199,000 x 70,000 17,000 199,000 70,000 x 17,000 199,000 x Total overhead costs $ 286,000 $309,000 $ 309,000 $426,000 $ 444,000 S 309,000 S 462,000 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.) Actual Cost Actual quantity x Actual price Actual quantity X 239,800 x $ 7.58 239,800 x $ Standard price 6.00 $ $ 1,818,800 1,438,800 Variable overhead spending variance Variable overhead efficiency variance Total variable overhead cost variance $380,000 $ 380,000 Unfavorable 30,000 Unfavorable $ 19,800 Unfavorable $ 30,000 Standard Cost Standard quantity x Standard price 244,800 x $ 6.00 $ 1,468,800 3. Compute the direct labor variance, including its rate and efficiency variances. (Indicate the effect of each variance by selecting favorable, unfavorable, or no variance. Round "Rate per hour" answers to two decimal places.) Actual Cost Actual hours x Actual rate 21,000 x $ 12.20 $ 256,200 Direct labor rate variance Direct labor efficiency variance Total direct materials variance $ 4,200 Actual hours Standard rate 21,000 x $ 12.00 $252,000 S 4,200 Unfavorable 36,000 Favorable $ 40,200 Favorable $ 36,000 Standard Cost Standard hours x Standard rate 24,000 X $ 12.00 $ 288,000 4. Prepare a detailed overhead variance report that shows the variances for individual items of overhead. (Indicate the effect of each variance by selecting favorable, unfavorable, or no variance.) ANTUAN COMPANY Overhead Variance Report For Month Ended October 31 Expected production volume 75% of capacity Production level achieved 75% of capacity Volume Variance No variance Flexible Budget Actual Results Variances Favorable/Unfavorable Variable overhead costs Indirect materials S 15,000 $ 41,900 $ 26,900 Unfavorable Indirect labor 75,000 176,500 101,500 Unfavorable Power 15,000 17,250 2,250 Unfavorable Maintenance 30,000 34,500 4,500 Unfavorable Total variable overhead costs 135,000 270,150 135,150 Unfavorable Fixed overhead costs Depreciation-Building 25,000 25,000 0 No variance Depreciation-Machinery 71,000 95,850 24,850 Unfavorable Taxes and insurance 17,000 15,300 Supervisory salaries 196,000 196,000 1,700 Favorable No variance Total fixed overhead costs 309,000 Total overhead costs $ 444,000 $ 332,150 $ 602,300 23,150 Unfavorable $ 158,300 Unfavorable Volume Variance Volume variance Total overhead variance $ 0 No variance $ 158,300 Unfavorable