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

Direct materials (4.0 Ibs. @ $6.00 per Ib.)	$	24.00
Direct labor (2.0 hrs. @ $14.00 per hr.)		28.00
Overhead (2.0 hrs. @ $18.50 per hr.)		37.00
Total standard cost	$	89.00

The predetermined overhead rate ($18.50 per direct labor hour) is based on an expected volume 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	$	15,000
Indirect labor		75,000
Power		15,000
Repairs and maintenance		45,000
Total variable overhead costs				$	150,000
Fixed overhead costs
DepreciationBuilding		24,000
DepreciationMachinery		70,000
Taxes and insurance		17,000
Supervision		294,000
Total fixed overhead costs					405,000
Total overhead costs				$	555,000

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

Direct materials (61,000 Ibs. @ $6.20 per lb.)				$	378,200
Direct labor (21,000 hrs. @ $14.30 per hr.)					300,300
Overhead costs
Indirect materials	$	41,650
Indirect labor		176,550
Power		17,250
Repairs and maintenance		51,750
DepreciationBuilding		24,000
DepreciationMachinery		94,500
Taxes and insurance		15,300
Supervision		294,000			715,000
Total costs				$	1,393,500

Required: 1&2. Prepare flexible overhead budgets for October showing the amounts of each variable and fixed cost at the 65%, 75%, and 85% capacity levels and classify all items listed in the fixed budget as variable or fixed.

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

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

5. Prepare a detailed overhead variance report that shows the variances for individual items of overhead.