For May, Mariana company planned production of 8,000 units (80% of its production capacity of 10,000 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 $3.85 per DLH. 80% Operating Overhead Budget Level Production (in units) 8,000 Budgeted overhead Variable overhead costs Indirect materials $ 15,000 Indirect labor 24,000 Power 6,000 Maintenance 3,000 Total variable overhead costs 48,000 Fixed overhead costs Rent of building 15,000 DepreciationMachinery 10,000 Supervisory salaries 19,400 Total fixed overhead costs 44,400 Total overhead $ 92,400 It actually operated at 90% capacity (9,000 units) in May and incurred the following actual overhead. Actual Overhead Costs Indirect materials $ 15,000 Indirect labor 26,500 Power 6,750 Maintenance 4,000 Rent of building 15,000 DepreciationMachinery 10,000 Supervisory salaries 22,000 Actual total overhead $ 99:250 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 9,000 units. Required 1 Required 2 Required 3 Compute the overhead controllable variance and identify it as favorable or unfavorable. (Indicate the effect of the variance by selecting favorable, unfavorable, or no variance.) Actual total overhead $ 139,125 Budgeted (exible) overhead _ Fixed overhead $ 61,200 _ Variable overhead 76.950 138,150 Controllable variance $ 975 Unfavorable Required 2 > Required 1 Required 2 Required 3 Compute the overhead volume variance and identify it as favorable or unfavorable. (Indicate the effect of the variance by selecting favorable, unfavorable, or no variance.) Volume Variance Budgeted (flexible) overhead $ 61,200 Total fixed costs 68,850 Volume variance $ 7,650 Favorable Required 1 Required 2 Required 3 Prepare an overhead variance report at the actual activity level of 9,000 units. (Indicate the effect of each variance by selecting favorable, unfavorable, or no variance.) MARIANA COMPANY Overhead Variance Report For Month Ended May 31 Expected 80% of capacity Actual 90% of capacity Volume variance $ 7,650 Favorable Controllable Variance Flexible Budget Actual Results Variances Favorable/Unfavorable Variable overhead costs: Indirect materials $ 21,600 $ 21,600 $ 0 No variance Indirect labor 36,000 40, 150 4,150 Unfavorable Power 7,200 8, 100 900 Unfavorable Maintenance 3,600 4,875 1,275 Unfavorable 68,400 74,725 6,325 Unfavorable Fixed overhead costs:Fixed overhead costs: Rent of building 20,000 20,000 0 No variance Depreciation-Machinery 11,700 11,700 0 No variance Supervisory salaries 29,500 32,700 3,200 Unfavorable 61,200 64,400 3,200 Unfavorable Total overhead costs $ 129,600 $ 139, 125 $ 9,525 Unfavorable Volume Variance Volume variance Total overhead variance