Ana Carillo and Associates is a medium-sized company located near a large metropolitan area in the Midwest. The company manufactures cabinets of mahogany, oak, and other fine woods for use in expensive homes, restaurants, and hotels. Although some of the work is custom, many of the cabinets are a standard size. One such non-custom model is called Luxury Base Frame. Normal production is 1,000 units. Each unit has a direct labor hour standard of 5hours. Overhead is applied to production based on standard direct labor hours. During the most recent month, only 900 units were produced; 4,500 direct labor hours were allowed for standard production, but only 4,000 hours were used. Standard and actual overhead costs were as follows.

		Standard (1,000 units)			Actual (900 units)
Indirect materials		$ 12,000			$ 12,300
Indirect labor		43,000			51,000
(Fixed) Manufacturing supervisors salaries		22,500			22,000
(Fixed) Manufacturing office employees salaries		13,000			12,500
(Fixed) Engineering costs		27,000			25,000
Computer costs		10,000			10,000
Electricity		2,500			2,500
(Fixed) Manufacturing building depreciation		8,000			8,000
(Fixed) Machinery depreciation		3,000			3,000
(Fixed) Trucks and forklift depreciation		1,500			1,500
Small tools		700			1,400
(Fixed) Insurance		500			500
(Fixed) Property taxes		300			300
Total		$144,000			$150,000

Determine the overhead application rate:

Determine how much overhead was applied to production:

Calculate the Total Overhead Variance, Controllable Variance, and Volume Variance: