Compute the direct materials variance, including its price and quantity variances. Indicate the effect of each variance by selecting for favorable, unfavorable, and No variance.

istory Bookmarks Window Help O A ezto.mheducation.com M Connect Saved [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 (1.8 hrs. @ $12.00 per hr. ) 21. 60 Overhead (1.8 hrs. @ $18.50 per hr. ) 33.30 Total standard cost $66. 90 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 $ 15, 000 Indirect labor 75, 000 Power 15, 000 Repairs and maintenance 30, 000 Total variable overhead costs $135, 000 Fixed overhead costs Depreciation-Building 24, 000 Depreciation-Machinery 71, 000 Taxes and insurance 18, 000 Supervision 251, 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, 000 Ibs. @ $4.10 per lb. ) 188, 600 Direct labor (19, 000 hrs. @ $12. 10 per hr. ) 229, 900 Overhead costs Indirect materials $ 41, 500 Indirect labor Power 176, 750 17, 250 Repairs and maintenance 34, 500 Depreciation-Building 24, 000 Depreciation-Machinery 95 , 850 Taxes and insurance 16, 200 Supervision 251, 500 657 , 550 Total costs $1, 076, 050 3. Compute the direct materials cost variance, including its price and quantity variances. (Indicate the effect of each variance by selecting for favorable, unfavorable, and No variance.) Actual Cost Actual quantity Actual price Standard Cost Actual quantity Standard price Standard quantity Standard pri $ 0 $ 0 Direct materials price variance $ 0Unfavorable Direct materials quantity variance Total direct materials variance 0 Unfavorable Unfavorable