Zelman-Wu Company set the following standard costs for one unit of its product. Direct materials (6 lbs @ $5 per lb.) S 30 Direct labor (2 hrs @ $17 per hr.) 34 Overhead (2 hrs @ $18.50 per hr) 37 Total standard cost S101 The predetermined overhead rate ($18.50 per direct labor hour) is based on an expected volume 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 Repairs and maintenance 90.000 Total variable overhead costs $360,000 Fixed overhead costs Depreciation Building 24,000 Depreciation - Machinery 80,000 Taxes and insurance 12,000 Supervision 79.000 Total fixed overhead costs 195.000 Total overhead costs S555,000 The company incurred the following actual costs when it operated at 75% of capacity in October Direct materials (91,000 lbs. @ 55.10 per 1b.) $ 464,100 Direct labor (30,500 hrs. @ 517.25 per hr.) 526,125 Overhead costs Indirect materials S 44,250 Indirect labor 177.750 Power 43,000 Repairs and maintenance 96,000 Depreciation - Building 24,000 Depreciation-Machinery 75,000 Taxes and insurance 11,500 Supervision 89,000 560,500 Total costs 51.550.725 Required 1. Examine the monthly overhead budget to (a) determine the costs per unit for each variable overhead item and its total per unit costs and (b) identify the total fixed costs per month 2. Prepare flexible overhead budgets for October showing the amounts of each variable and fixed cost at the 65%, 75%, and 85% capacity levels. 3. Compute the direct materials cost variance, including its price and quantity variances 4. Compute the direct labor cost variance, including its rate and efficiency variances. 5. Prepare a detailed overhead variance report that shows the variances for individual items of overhead; see text for example