12 James Corp. applies overhead on the basis of direct labor hours. For the month of May, the company planned production of 10,000 units (80% of its production capacity of 12,500 units) and prepared the following overhead budget: 3 points Operating Levels 80% 10,000 26,000 Overhead Budget Production in units Standard direct labor hours Budgeted overhead Variable overhead costs Indirect materials Indirect labor Power Maintenance Total variable costs Fixed overhead costs Rent of factory building Depreciation Machinery Supervisory salaries Total fixed costs Total overhead costs $18, 200 26,000 5,200 2,600 52,000 19,000 11,600 16,200 46,800 $98,800 During May, the company operated at 90% capacity (11,250 units) and incurred the following actual overhead costs: Overhead costs (actual) Indirect materials Indirect labor Power Maintenance Rent of factory building Depreciation-Machinery Supervisory salaries Total actual overhead costs $ 18,200 28,950 5,850 3,745 19,000 11,600 19,300 $106,645 1. Compute the overhead controllable variance and classify it as favorable or unfavorable. 2. Compute the overhead volume variance and classify it as favorable or unfavorable. 3. Prepare an overhead variance report at the actual activity level of 11,250 units. Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Compute the overhead controllable variance and classify it as favorable or unfavorable. (Indicate the effect of each variance by selecting for favorable, unfavorable, and no variance.) Controllable variance Total actual overhead $ 114,630 Flexible budget overhead Variable $ 58,500 Fixed 54,600 Total 113,100 Overhead controllable variance S 1,530 Unfavorable Required 1 Required 2 > > Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Compute the overhead volume variance and classify it as favorable or unfavorable. (Indicate the effect of each variance by selecting for favorable, unfavorable, and no variance. Do not round intermediate calculations.) Volume Variance Total budgeted fixed OH 54,600 X Total fixed overhead applied 61,425 x Volume variance $ 6,825 X Favorable JAMES CORP 3 points Expected production volume Production level achieved Overhead Variance Report For Month Ended May 31 80% of capacity 90% of capacity S 6,825 Favorable Actual Flexible Budget Results Volume variance Variances Fav./Unfav. s 17,550 XS Controllable Variance Variable overhead costs: Indirect materials Indirect labor Power Maintenance 29,250 15,600 Xs $ 28,800 X 8,775 X 3,555 % 1,950 X Favorable 450 X Favorable 0 No variance 630 X Unfavorable lolololo 8,775 X 2,925 58,500 56,730 1,770 Favorable Total variable costs Fixed overhead costs: Rent of factory building Depreciation-Machinery Supervisory salaries 22,000 X 10,700 X 22,000 X 10,700 25,200 X No variance 0 No variance 3,300 X Unfavorable OOO 21,900 X Total fixed costs 57,900 3,300 X Unfavorable 54,600 113,100 Total overhead costs $ 114,630 S 1,530 X Unfavorable M