Required information [The following information applies to the questions displayed below.) Antuan Company set the following standard costs for one unit of its product. Direct materials (5.0 Ibs. @ $5.00 per Ib.) Direct labor (1.9 hrs. @ $10.00 per hr.) Overhead (1.9 hrs. @ $18.50 per hr.) Total standard cost $25.00 19.00 35.15 $79.15 The predetermined overhead rate ($18.50 per direct labor hour) is based on an expected volume 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 $ 15,000 Indirect labor 75,000 Power 15,000 Repairs and maintenance 30,000 Total variable overhead costs Fixed overhead costs Depreciation-Building 25,000 Depreciation Machinery 71,000 Taxes and insurance 17,000 Supervision 279, 250 Total fixed overhead costs Total overhead costs $135,000 392,250 $527,250 The company incurred the following actual costs when it operated at 75% of capacity in October $ 397,800 218,400 Direct materials (76,500 lbs. @ $5.20 per lb.) Direct labor (21,000 hrs. @ $10.40 per hr.) Overhead costs Indirect materials Indirect labor Power Repairs and maintenance Depreciation-Building Depreciation-Machinery Taxes and insurance Supervision Total costs $ 41,350 176, 100 17,250 34,500 25,000 95,850 15,300 279, 250 684,600 $1,300,800 3. Compute the direct materials cost variance, including its price and quantity variances. AQ = Actual Quantity SQ = Standard Quantity AP = Actual Price SP = Standard Price Actual Cost AQ X 20,000 X X Answer is complete but not entirely correct. Standard Cost AQ X SP SQ X 20,000 X X $10.00 28,500 X X AP $ 10.20 SP $ 10.00 204,000 200,000 285,000 $ 4,000 85,000 Direct labor rate variance Direct labor efficiency variance Total direct materials variance X $4,000 85,000 81,000 * Unfavorable Favorable Favorable 4. Compute the direct labor cost variance, including its rate and efficiency variances. AH = Actual Hours SH = Standard Hours AR = Actual Rate SR = Standard Rate Actual Cost Standard Cost $ 0 SO