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Problem 21-5A Flexible budget preparation; computation of materials, labor and overhead variances; and overhead variance report P1 P2 P3 C2 Antuan Company set the following standard costs for one unit of its product. Direct materials (6 lbs. @ $5 per lb.)... Direct labor (2 hrs. @ $17 per hr.). Overhead (2 hrs.@ $18.50 per hr.).... $ 30 34 37 $10 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% level. Overhead Budget (75% Capacity) Variable overhead costs Indirect materials Indirect labor... Power Repairs and maintenance Total variable overhead costs $ 45,000 80,000 45,000 90,000 $360.000 Fixed overhead costs 24,000 80,000 2,000 79,000 Depreciation- building Taxes and insurance Total fixed overhead costs 195,000 Total overhead costs $555,000 The company incurred the following actual costs when it operated at 7 5% of capacity in October. Direct materials (91,000 lbs. $5.10 per lb.) Direct labor (30,500 hrs. $17.25 per hr.) Overhead costs $464,100 526,125 Indirect materials Indirect labor.. Power Repairs and maintenance.. Depreciation-building. Depreciation-machinery 44,250 177,750 43,000 96,000 24,000 75,000 ...1,500 89,000 560,500 $1,550,725 Supervision .. Total costs Required 1. Examine the monthly overhead budget to (a) determine the costs per unit for each variable overhead Check (2) Budgeted total overhead at 13,000 units, $507000 item and its total per unit costs, and (b) identify the total fixed costs per month. Prepare flexible overhead budgets (as in Exhibit 2.12) for October showing the amounts of each van able and fixed cost at the 65%, 75%, and 85% capacity levels. 2. 3) Materials variances

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