Required information Problem 21-3A Flexible budget preparation;computation of materials, labor, and overhead variances; andoverhead variance report LO P1, P2, P3, C2 [The followinginformation applies to the questions displayed below.] AntuanCompany set the following standard costs for one unit of itsproduct. Direct materials (6 Ibs. @ $5 per Ib.) $ 30 Direct labor(2 hrs. @ $17 per hr.) 34 Overhead (2 hrs. @ $18.50 per hr.) 37Total standard cost $ 101 The predetermined overhead rate ($18.50per direct labor hour) is based on an expected volume of 75% of thefactory’s capacity of 20,000 units per month. Following are thecompany’s budgeted overhead costs per month at the 75% capacitylevel. Overhead Budget (75% Capacity) Variable overhead costsIndirect materials $ 45,000 Indirect labor 180,000 Power 45,000Repairs and maintenance 90,000 Total variable overhead costs $360,000 Fixed overhead costs Depreciation—Building 24,000Depreciation—Machinery 80,000 Taxes and insurance 12,000Supervision 79,000 Total fixed overhead costs 195,000 Totaloverhead costs $ 555,000 The company incurred the following actualcosts when it operated at 75% of capacity in October. Directmaterials (91,000 Ibs. @ $5.10 per lb.) $ 464,100 Direct labor(30,500 hrs. @ $17.25 per hr.) 526,125 Overhead costs Indirectmaterials $ 44,250 Indirect labor 177,750 Power 43,000 Repairs andmaintenance 96,000 Depreciation—Building 24,000Depreciation—Machinery 75,000 Taxes and insurance 11,500Supervision 89,000 560,500 Total costs $ 1,550,725 Problem 21-3APart 1&2 Required: 1&2. Prepare flexible overhead budgetsfor October showing the amounts of each variable and fixed cost atthe 65%, 75%, and 85% capacity levels and classify all items listedin the fixed budget as variable or fixed.