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 17,000 Supervision 308,000 Total fixed overhead costs 420,000 Total overhead costs $ 555,000

The company incurred the following actual costs when it operated at 75% of capacity in October. Direct materials (46,000 Ibs. @ $4.20 per lb.) $ 193,200 Direct labor (22,000 hrs. @ $14.30 per hr.) 314,600 Overhead costs Indirect materials $ 41,900 Indirect labor 176,650 Power 17,250 Repairs and maintenance 34,500 DepreciationBuilding 25,000 DepreciationMachinery 94,500 Taxes and insurance 15,300 Supervision 308,000 713,100 Total costs $ 1,220,900 rev: 03_28_2018_QC_CS-122864

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.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 (2.0 hrs. @ $14.00 per hr.) 28.00 Overhead (2.0 hrs. @ $18.50 per hr.) 37.00 Total standard cost $ 77.00