Suncoast Company set the following standard costs per unit for its product. $27 Direct materials (4.5 lbs. @ $6 per Ib.) Direct labor (1.5 hrs. @ $12 per hr.) Overhead (1.5 hrs. @ $16 per hr.) 18 24 Standard cost per unit $69 The standard overhead rate ($16 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 $ 22,500 Indirect labor 90,000 Power 22,500 Maintenance 45,000 180,000 24,000 72,000 Total variable overhead costs Fixed overhead costs Depreciation-Building Depreciation-Machinery Taxes and insurance Supervisory salaries Total fixed overhead costs Total overhead costs 18,000 66,000 180,000 $360,000 The company incurred the following actual costs when it operated at 75% of capacity in December. Direct materials (69,000 lbs. @ $6.10 per Ib.) Direct labor (22,800 hrs. @ $12.30 per hr.) Overhead costs $ 420,900 280,440 Indirect materials $21,600 Indirect labor 82,260 Power 23,100 46,800 24,000 75,000 Maintenance Depreciation-Building Depreciation-Machinery Taxes and insurance Supervisory salaries Total costs 16,500 66,000 355,260 $1,056,600 Required 1. Prepare flexible overhead budgets (as in Exhibit 21.12) for December showing amounts of each variable and fixed cost at the 65%, 75%, and 85% capacity levels. Check (1) Budgeted total overhead at 17,000 units, $384,000 2. Compute the direct materials variance, including its price and quantity variances. 3. Compute the direct labor variance, including its rate and efficiency variances. 4. Prepare a detailed overhead variance report (as in Exhibit 21.16) that shows the variances for individual items of overhead