For May, Mariana company planned production of $12,800$ units $(80\%$ of its production capacity of $16,000$ 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\mathrm{.}79$ per DLH$.$

Overhead Budget $80\%$ Operating Level

Production $($in units$)12,800$

Budgeted overhead

Variable overhead costs

Indirect materials $ $23,040$

Indirect labor $38,400$

Power $9,600$

Maintenance $3,456$

Total variable overhead costs $74,496$

Fixed overhead costs

Rent of building $24,000$

Depreciation$$Machinery $16,000$

Supervisory salaries $31,040$

Total fixed overhead costs $71,040$

Total overhead $ $145,536$

It actually operated at $90\%$ capacity $(14,400$ units$)$ in May and incurred the following actual overhead.

Actual Overhead Costs

Indirect materials $ $23,040$

Indirect labor $41,500$

Power $10,800$

Maintenance $7,600$

Rent of building $24,000$

Depreciation$$Machinery $16,000$

Supervisory salaries $34,000$

Actual total overhead $ $156,940$

Compute the overhead controllable variance and identify it as favorable or unfavorable.

Compute the overhead volume variance and identify it as favorable or unfavorable.

Prepare an overhead variance report at the actual activity level of $14,400$ units.