Blaze Corp. applies overhead on the basis of direct labor hours. For the month of March, the company planned production of 9,600 units (80% of its production capacity of 12,000 units) and prepared the following budget.

	Operating Levels
Overhead Budget	80%
Production in units		9,600
Standard direct labor hours		24,000
Budgeted overhead
Variable overhead costs
Indirect materials	$	10,000
Indirect labor		19,000
Power		5,000
Maintenance		2,000
Total variable costs		36,000
Fixed overhead costs
Rent of factory building		13,000
DepreciationMachinery		20,000
Taxes and insurance		2,400
Supervisory salaries		12,600
Total fixed costs		48,000
Total overhead costs	$	84,000

During March, the company operated at 90% capacity (10,800 units), and it incurred the following actual overhead costs.

Overhead costs (actual)
Indirect materials	$	10,000
Indirect labor		19,000
Power		5,625
Maintenance		2,500
Rent of factory building		13,000
DepreciationMachinery		16,000
Taxes and insurance		2,900
Supervisory salaries		18,000
Total actual overhead costs	$	87,025

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.

Controllable Variance BLAZE CORP. Overhead Variance Report For Month Ended March 31 Total actual overhead Flexible budget overhead Expected production volume Production level achieved Volume variance Controllable Variance Flexible Budget Actual Results Variances Fav. / Unfav. Total 0 Variable overhead costs: Overhead controllable variance Volume Variance Fixed overhead costs: Volume variance Total overhead costs