Blaze Corp. applies overhead on the basis of direct labor hours. For the month of March, the company planned production of 8,000 units (80% of its production capacity of 10,000 units) and prepared the following budget:

	Operating Levels
Overhead Budget	80%
Production in units		8,000
Standard direct labor hours		32,000
Budgeted overhead
Variable overhead costs
Indirect materials	$	10,000
Indirect labor		16,000
Power		4,000
Maintenance		2,000
Total variable costs		32,000
Fixed overhead costs
Rent of factory building		12,000
DepreciationMachinery		20,000
Taxes and insurance		2,400
Supervisory salaries		13,600
Total fixed costs		48,000
Total overhead costs	$	80,000

During March, the company operated at 90% capacity (9,000 units), and it incurred the following actual overhead costs.

Overhead Costs
Indirect materials	$	10,000
Indirect labor		16,000
Power		4,500
Maintenance		3,000
Rent of factory building		12,000
DepreciationMachinery		19,200
Taxes and insurance		3,000
Supervisory salaries		14,000
Total actual overhead costs	$	81,700

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.

Required 1 Required 2 Required 3 Compute the overhead controllable variance. Classify as favorable or unfavorable. Controllable Variance Total actual overhead Flexible budget overhead Total Overhead controllable variance Required 1 Required 2 >