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.) Standard Cost Actual Cost Antuan Company set the following standard costs per unit for its product. Direct materials (3.6 pounds @ $5.00 per pound) $ 15.00 Direct labor (1.8 hours @ $11.00 per hour) 19.80 Overhead (1.8 hours @ $18.50 per hour) 33.30 Standard cost per unit $ 68.10 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 (754 Capacity) Variable overhead costs Indirect materials $ 15,000 Indirect labor 75,000 Power 15,000 Maintenance 30,000 Total variable overhead costs 135,000 Fixed overhead costs Depreciation-Building 25,000 Depreciation-Machinery 71,000 Taxes and insurance 18,000 Supervisory salaries 250,500 Total fixed overhead costs 364,500 Total overhead costs $ 499,500 The company incurred the following actual costs when it operated at 75% of capacity in October. Direct materials (46,500 pounds @ $5.20 per pound) $ 241,800 Direct labor (20,000 hours @ $11.10 per hour) 222,000 Overhead costs Indirect materials $ 41,550 Indirect labor 176,800 Power 17,250 Maintenance 34,500 Depreciation-Building 25,000 Depreciation Machinery 95,850 Taxes and insurance 16,200 Supervisory salaries 250,500 657, 650 Total costs $ 1,121,450