Exercise 08-22 Overhead controllable and volume varlances; overhead varlance report LO P4 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 80% 10, eee 20,eee Overhead Budget Production in units Standard direct labor hours Budgeted overhead Variable overhead costs Indirect materials Indirect labor Power Maintenance Total variable costs Fixed overhead costs Rent of factory building Depreciation-Machinery Taxes and insurance Supervisory salaries Total fixed costs Total overhead costs $ 21, eae 25,000 6,800 5,200 58, eae 24, cee 28,800 3,800 12,200 68,000 $126,00 During March, the company operated at 90% capacity (11.250 units), and it incurred the following actual overhead costs. Overhead costs (actual) Indirect materials $ 21, eee Indirect labor 25, eee Power 7,650 Maintenance 6,580 Rent of factory building 24,99 Depreciation Machinery 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. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 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.) Controllable Variance Total actual overhead Flexible budget overhead Variable Fixed Total 0 Overhead controllable variance Required 1 Required 2 > Complete this question by entering your answers in the tabs below. 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 Total budgeted fixed OH Total fixed overhead applied Volume variance Favorable Required 1 Required 2 Required 3 Prepare an overhead variance report at the actual activity level of 9,000 units. Classify as favorable or unfavorable. (Indicate the effect of each variance by selecting for favorable, unfavorable, and no variance. Do not round intermediate calculations.) BLAZE CORP Overhead Variance Report For Month Ended March 31 80% of capacity Expected production volume Production level achieved 90% of capacity Favorable Actual Results Flexible Budget Variances Fav./Unfav. Volume variance Controllable Variance Variable overhead costs: Indirect materials Indirect labor Power Maintenance Favorable Favorable No variance Unfavorable Favorable Total variable costs Fixed overhead costs: Rent of factory building Taxes and insurance DepreciationMachinery Supervisory salaries No variance Unfavorable Favorable Unfavorable Total fixed costs Unfavorable Total overhead costs Favorable Complete this question by entering your answers in the tabs below. 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 Total budgeted fixed OH Total fixed overhead applied Volume variance Favorable Required 1 Required 2 Required 3 Prepare an overhead variance report at the actual activity level of 9,000 units. Classify as favorable or unfavorable. (Indicate the effect of each variance by selecting for favorable, unfavorable, and no variance. Do not round intermediate calculations.) BLAZE CORP Overhead Variance Report For Month Ended March 31 80% of capacity Expected production volume Production level achieved 90% of capacity Favorable Actual Results Flexible Budget Variances Fav./Unfav. Volume variance Controllable Variance Variable overhead costs: Indirect materials Indirect labor Power Maintenance Favorable Favorable No variance Unfavorable Favorable Total variable costs Fixed overhead costs: Rent of factory building Taxes and insurance DepreciationMachinery Supervisory salaries No variance Unfavorable Favorable Unfavorable Total fixed costs Unfavorable Total overhead costs Favorable