Blaze Corp. applies overhead on the basis of direct labor hours. For the month of March, the company planned production of 10,000 units (80% of its production capacity of 12,500 units) and prepared the following budget. Overhead Budget Production in units Standard direct labor hours Budgeted overhead Variable overhead costs Indirect materials Indirect labor Power Operating Levels 80% 10,000 24,000 $ 20,000 25,000 10,000 Maintenance 5,000 Total variable costs. 60,000 Fixed overhead costs Rent of factory building 22,000 Depreciation-Machinery 30,000 Taxes and insurance 3,400 Supervisory salaries Total fixed costs Total overhead costs 16,600 72,000 $132,000 During March, the company operated at 90% capacity (11,250 units), and it incurred the following actual overhead costs. Overhead costs (actual) Indirect materials Indirect labor $ 20,000 25,000 Power 11,250 Maintenance 6,315 Rent of factory building 22,000 Depreciation-Machinery 28,000 Taxes and insurance 4,050 Supervisory salaries 18,850 Total actual overhead costs $135,465 1. Compute the overhead controllable variance. 2. Compute the overhead volume variance. 3. Prepare an overhead variance report at the actual activity level of 9,000 units. Compute the overhead controllable variance. Classify as favorable or unfavorable. (Indicate the effect of each variance by selecting for favorable, unfavorable, and no variance. Do not round intermediate calculations.) Total actual overhead Flexible budget overhead Controllable Variance Total Overhead controllable variance Required 1 Required 2 Required 3 Compute the overhead volume variance. Classify 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 Volume Variance Expected production volume Production level achieved Volume variance Controllable Variance Variable overhead costs: BLAZE CORP. Overhead Variance Report For Month Ended March 31 Flexible Budget Actual Results Variances Fixed overhead costs: Total overhead costs Fav. / Unfav