Exercise 21-25 (Algo) Overhead controllable and volume variances; overhead variance report LO P4 For May, Mariana company planned production of 22,400 units (80% of its production capacity of 28,000 units) and prepared the following overhead budget. The company applies overhead with a standard of 3 DLH per unit and a standard overhead rate of $3.79 per DLH. Overhead Budget Production (in units) Budgeted overhead Variable overhead costs Indirect materials Indirect labor 80% Operating Level 22,400 $ 40,320 67,200 Power 16,800 Maintenance 6,048 Total variable overhead costs 130,368 Fixed overhead costs Rent of building Depreciation-Machinery Supervisory salaries Total fixed overhead costs Total overhead It actually operated at 90% capacity (25,200 units) in May and incurred the following actual overhead. 42,000 28,000 54,320 124,320 $ 254,688 Indirect labor Power Maintenance Actual Overhead Costs. Indirect materials $ 40,320 71,500 18,900 14,800 42,000 28,000 58,000 $ 273,520 Rent of building Depreciation-Machinery Supervisory salaries Actual total overhead 1. Compute the overhead controllable variance and identify it as favorable or unfavorable. 2. Compute the overhead volume variance and identify it as favorable or unfavorable. 3. Prepare an overhead variance report at the actual activity level of 25,200 units.