Exercise 8-21 Overhead controllable and volume variances; overhead varlance report LO P3 James Corp. applies overhead on the basis of direct labor hours. For the month of May, the company planned production of 9.500 units (80% of its production capacity of 12,000 units) and prepared the following overhead budget: Operating Levels 80% 9,600 24,000 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 Supervisory salaries Total fixed costs Total overhead costs $18,000 24,000 5, 400 3,000 50,400 20,000 10,500 16,300 46,800 $97,200 During May, the company operated at 90% capacity (10,800 units) and incurred the following actual overhead costs: Overhead costs Indirect materials Indirect labor Power Maintenance Rent of factory building Depreciation-Machinery Supervisory salaries Total actual overhead costs $ 18,000 26,650 6,075 3,995 20,000 10,500 19,400 $104,620 Depreciation Machinery Supervisory salaries Total actual overhead costs 10,500 19,400 $104, 620 1. Compute the overhead controllable variance. 2. Compute the overhead volume variance. 3. Prepare an overhead variance report at the actual activity level of 10,800 units Answer is not complete. 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. $ 104,620 Controllable variance Total actual overhead Flexible budget overhead Variable Fixed Total Overhead controllable variance $ 56,700 46,800 103,500 $ 1,120 | Untavorable Required 2 > 1. Compute the overhead controllable variance. 2. Compute the overhead volume variance. 3. Prepare an overhead variance report at the actual activity level of 10,800 units. Complete this question by entering your answers in the tabs below. Required 1 Requireal2 Required 3 Compute the overhead volume variance. Classify as favorable or unfavorable. (Do not round intermediate calculations.) Volume Variance Total fixed overhead applied Total budgeted fixed OH Volume variance Favorable Required 1 Required 2 Required 3 Prepare an overhead variance report at the actual activity level of 10,800 units. Classify as favorable or unfavorable. (Do round intermediate calculations.) JAMES CORP. Overhead Variance Report For Month Ended May 31 Expected production volume 80% of capacity Production level achieved 90% of capacity Volume variance Favorable Controllable Variance ance Flexible Budget Actual Results Variances Fav.Juntav. Variable overhead costs: Indirect materials $ 20,250 $ 18,000 $ 2,250 Favorable Indirect labor 27,000 26,650 350 Favorable Power 6,075 6,075 Maintenance 3,375 3 ,995 (620) Unfavorable AN 5 4,720 1,980 Favorable Total variable costs Fixed overhead costs Rent of factory building Depreciation Machinery Supervisory salaries 56,700 RSS S 20,000 10,500 16,300 $ 20,000 10,500 19.400 (3,100) Unfavorable 46,800 103,500 4 9900 104,620 (3.100) Unfavorable (1.120) Unfavorable Total overhead costs $ $ $ Required 2