TUTU SUS5 per unit for its product Direct materials (6 pounds 55 per pound) Direct labor (2 hours $17 per hour) Overhead (2 hours $18.50 per hour) Standard cost per unit 530 34 37 5 101 The standard overhead rate ($18,50 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 $ 45,000 Indirect labor 180.000 Power 45,000 Maintenance 90.000 Total variable overhand costs 360,000 Fixed overhead costs Depreciation-building 24,000 Depreciation-Machinery 80,000 Taxes and insurance 12,000 Supervisory salaries 79.000 Total fixed overhead costs 195,000 Total overhead costs $ 555,000 The company incurred the following actual costs when it operated at 75% of capacity in October $464,100 526, 125 Direct materials (91,000 pounds $5.10 per pound) Direct labor (30,500 hours $17.25 per hour) overhead cost Indirect materials Indirect labor Power Maintenance Depreciation-Building Depreciation Machinery Taxes and insurance Supervisory salaries Total costs $ 44,250 177,750 43,000 96,000 24,000 75,000 11,500 89.000 560,500 $ 1,550, 725 2. Compute the direct materials variance, including its price and quantity variances. (Indicate the effect of each variance by selecting favorable, unfavorable, or no variance.) Actual Cost