For May, Mariana company planned production of 10,000 units (80% of its production capacity of 12,500 units) and prepared the following overhead budget. The company applies overhead with a standard of 4 DLH per unit and a standard overhead rate of $4 per DLH. Overhead Budget 80% Operating Level Production (in units) 10,000 Budgeted overhead Variable overhead costs Indirect materials $ 21,600 Indirect labor 36,000 Power 7,200 Maintenance 3,600 Total variable overhead costs 68,400 Fixed overhead costs Rent of building 20,000 DepreciationMachinery 11,700 Supervisory salaries 29,500 Total fixed overhead costs 61,200 Total overhead $ 129,600 It actually operated at 90% capacity (11,250 units) in May and incurred the following actual overhead. Actual Overhead Costs Indirect materials $ 21,600 Indirect labor 40,150 Power 8,100 Maintenance 4,875 Rent of building 20,000 DepreciationMachinery 11,700 Supervisory salaries 32,700 Actual total overhead $ 139,125 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 11,250 units.