Bond Company developed its annual manufacturing overhead budget for its master budget for 2014 as follows:

Expected annual operating capacity 240,000 Direct Labor Hours

Variable overhead costs Indirect labor ($3.50 per direct labor hour) $840,000

Indirect materials ($0.75 per direct labor hour) 180,000

Factory supplies ($0.25 per direct labor hour) 60,000

Total variable 1,080,000

Fixed overhead costs

Depreciation 360,000

Supervision 240,000 Property taxes 120,000

Total fixed 720,000

Total costs $1,800,000

The relevant range for monthly activity is expected to be between 16,000 and 24,000 direct labor hours. Instructions Prepare a static budget variance analysis if 10,000 units were produced last month