For May, Mariana company planned production of 16,800 units (80% of its production capacity of 21,000 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	80% Operating Level
Production (in units)	16,800
Budgeted overhead
Variable overhead costs
Indirect materials	$ 30,240
Indirect labor	50,400
Power	12,600
Maintenance	4,536
Total variable overhead costs	97,776
Fixed overhead costs
Rent of building	31,500
DepreciationMachinery	21,000
Supervisory salaries	40,740
Total fixed overhead costs	93,240
Total overhead	$ 191,016

It actually operated at 90% capacity (18,900 units) in May and incurred the following actual overhead.

Actual Overhead Costs
Indirect materials	$ 30,240
Indirect labor	54,000
Power	14,175
Maintenance	10,600
Rent of building	31,500
DepreciationMachinery	21,000
Supervisory salaries	44,000
Actual total overhead	$ 205,515

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 18,900 units.