Antuan Company set the following standard costs for one unit of its product.

Direct materials (4.0 Ibs. @ $4.00 per Ib.)	$	16.00
Direct labor (1.8 hrs. @ $12.00 per hr.)		21.60
Overhead (1.8 hrs. @ $18.50 per hr.)		33.30
Total standard cost	$	70.90

The predetermined overhead rate ($18.50 per direct labor hour) is based on an expected volume of 75% of the factorys capacity of 20,000 units per month. Following are the companys budgeted overhead costs per month at the 75% capacity level.

Overhead Budget (75% Capacity)

Variable overhead costs
Indirect materials	$	30,000
Indirect labor		75,000
Power		30,000
Repairs and maintenance		30,000
Total variable overhead costs				$	165,000
Fixed overhead costs
Depreciationbuilding		23,000
Depreciationmachinery		72,000
Taxes and insurance		17,000
Supervision		222,500
Total fixed overhead costs					334,500
Total overhead costs				$	499,500

The company incurred the following actual costs when it operated at 75% of capacity in October.

Direct materials (61,500 Ibs. @ $4.10 per lb.)				$	252,150
Direct labor (28,000 hrs. @ $12.20 per hr.)					341,600
Overhead costs
Indirect materials	$	41,600
Indirect labor		176,000
Power		34,500
Repairs and maintenance		34,500
Depreciationbuilding		23,000
Depreciationmachinery		97,200
Taxes and insurance		15,300
Supervision		222,500			644,600
Total costs				$	1,238,350
1. Prepare flexible overhead budgets for October showing the amounts of each variable and fixed cost at the 65%, 75%, and 85% capacity levels and classify all items listed in the fixed budget as variable or fixed 2. Calculate the direct materials cost variance, including its price and quantity variances.

ANTUAN COMPANY Flexible Overhead Budgets For Month Ended October 31 Flexible Budget Flexible Budget for Variable Amount par Uni Total Fixed Cost 65% of capac 75% of capac 85% of capac Sales (in units) Variable overhead costs Fixed overhead costs Total overhead costs