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14 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: 1.54 points Operating Levels 800 10,000 26,000 eBook 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 $ 15,600 26,000 7,800 2,600 52,000 Hint Print 22,000 10,700 21,900 54,600 $106,600 be References 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 coats $ 15,600 28,800 8,775 3,555 22,000 10,700 25,200 $114,630 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 $ 106,645 Flexible budget overhead Variable $ 46,800 Fixed 58,500 Total 105,300 Overhead controllable variance $ 1,345 Unfavorable Required 1 Required 2 > 14 Complete this question by entering your answers in the tabs below. 154 points eBook Hint Print DO Required 1 Required 2 Required 3 Prepare an overhead variance report at the actual activity level of 11,250 units. Classify as favorable or unfavorable. (Indicate the effect of each variance by selecting for favorable, unfavorable, and no variance. Do not round intermediate calculations.) JAMES CORP Overhead Variance Report For Month Ended May 31 Expected production volume 80% of capacity Production level achieved 90% of capacity Volume variance Favorable Controllable Variance Flexible Budget Actual Results Variances Fav./Unfav. Variable overhead costs: Indirect materials Favorable Indirect labor Favorable Power No variance Maintenance Unfavorable No variance Favorable Fixed overhead costs: Rent of factory building No variance Depreciation-Machinery No variance Supervisory salaries Unfavorable No variance Unfavorable References Total overhead costs Unfavorable