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 (3.0 Ibs. @ $4.00 per Ib.)	$	12.00
Direct labor (1.7 hrs. @ $10.00 per hr.)		17.00
Overhead (1.7 hrs. @ $18.50 per hr.)		31.45
Total standard cost	$	60.45

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		30,000
Total variable overhead costs				$	135,000
Fixed overhead costs
DepreciationBuilding		25,000
DepreciationMachinery		70,000
Taxes and insurance		18,000
Supervision		223,750
Total fixed overhead costs					336,750
Total overhead costs				$	471,750

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

Direct materials (45,500 Ibs. @ $4.20 per lb.)				$	191,100
Direct labor (23,000 hrs. @ $10.20 per hr.)					234,600
Overhead costs
Indirect materials	$	41,600
Indirect labor		176,700
Power		17,250
Repairs and maintenance		34,500
DepreciationBuilding		25,000
DepreciationMachinery		94,500
Taxes and insurance		16,200
Supervision		223,750			629,500
Total costs				$	1,055,200

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.

ANTUAN COMPANY Flexible Overhead Budgets For Month Ended October 31 Flexible Budget Variable Amount Total Fixed Cost 65% of capacity Flexible Budget for 75% of capacity 85% of capacity per Unit Sales (in units) Variable overhead costs Fixed overhead costs Total overhead costs Actual Cost Standard Cost 0 $ 0 $ 0 $ 0 0 Actual Cost Standard Cost $ 0 o 0 0 ANTUAN COMPANY Overhead Variance Report For Month Ended October 31 Expected production volume Production level achieved Volume variance Flexible Budget Actual Results Variances Fav. / Unfav. Variable costs Fixed costs Total overhead costs