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:

	Operating Levels
Overhead Budget	80%
Production in units		10,000
Standard direct labor hours		20,000
Budgeted overhead
Variable overhead costs
Indirect materials	$	21,000
Indirect labor		25,000
Power		6,800
Maintenance		5,200
Total variable costs		58,000
Fixed overhead costs
Rent of factory building		24,000
DepreciationMachinery		28,000
Taxes and insurance		3,800
Supervisory salaries		12,200
Total fixed costs		68,000
Total overhead costs	$	126,000

During March, the company operated at 90% capacity (11,250 units), and it incurred the following actual overhead costs.

Overhead Costs
Indirect materials	$	21,000
Indirect labor		25,000
Power		7,650
Maintenance		6,580
Rent of factory building		24,000
DepreciationMachinery		25,000
Taxes and insurance		4,650
Supervisory salaries		15,350
Total actual overhead costs	$	129,230

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.

ontrollable Variance Total actual overhead Flexible budget overhead Total Overhead controllable variance Volume Variance Volume variance Expected production volume Production level achieved Volume variance Controllable Variance Flexible Budget Actual Results Variances Fav. / Unfav. Variable overhead costs: Fixed overhead costs: Total overhead costs