cest Problem 21-3A (Algo) Flexible overhead budget; materials, labor, and overhead variances; and overhead variance report LO P1, P2, P3, P4 [The following information applies to the questions displayed below.] Antuan Company set the following standard costs per unit for its product. Direct materials (5.0 pounds $5.00 per pound) Direct labor (1.8 hours $12.00 per hour) Overhead (1.8 hours $18.50 per hour) Standard cost per unit $ 25.00 21.60 33.30 $79.90 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 Indirect labor Pover Maintenance $15,000 75,000 15,000. 30,000 Total variable overhead costs. 135,000 Fixed overhead costs Depreciation-Building Depreciation-Hachinery 25,000 71,000 Taxes and insurance. Supervisory salaries Total fixed overhead costs 17,000 251,500 364,500 Total overhead costs $ 499,500 The company incurred the following actual costs when it operated at 75% of capacity in October. Direct materials (76,500 pounds $5.20 per pound) Direct labor (21,000 hours $12.30 per hour). Overhead costs Indirect materials Indirect labor Pover $ 41,400 176,550 17,250 5397,800 258,300 The company incurred the following actual costs when it operated at 75% of capacity in October. Direct materials (76,500 pounds $5.20 per pound) Direct labor (21,000 hours $12.30 per hour) Overhead costs Indirect materials Indirect labor Power Maintenance Depreciation-Building Depreciation-Machinery Taxes and insurance Supervisory salaries Total costs $ 41,400 176,550 17,250 34,500 25,000 95,850 15,300 251,500 $ 397,800 258,300 657,350 S1 311 450 Required: 1. Prepare flexible overhead budgets for October showing amounts of each variable and fixed cost at the 65%, 75%, and 85% capacity levels. ANTUAN COMPANY Flexible Overhead Budgets For Month Ended October 31 Variable Amount Total Fixed per Unit Cost Production (in units) Variable overhead costs Fixed overhead costs Total overhead costs Flexible Budget at Capacity Level of 65% 75% 85% Problem 21-3A (Algo) Part 2 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 Standard Cost Problem 21-3A (Algo) Part 3 3. Compute the direct labor variance, including its rate and efficiency variances. (Indicate the effect of each variance by selecting favorable, unfavorable, or no variance. Round "Rate per hour" answers to two decimal places.) Actual Cost + Standard Cost 4. Prepare a detailed overhead variance report that shows the variances for individual items of overhead. (Indicate the effect of each variance by selecting favorable, unfavorable, or no variance.) Expected production volume Production level achieved Volume Variance ANTUAN COMPANY Overhead Variance Report For Month Ended October 31 Variable overhead costs Fixed overhead costs Total overhead costs Volume Variance Flexible Budget Actual Results Variances Favorable/Unfavorable Fixed overhead costs Total overhead costs Volume Variance Volume variance Total overhead variance