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Exercise 08-22 Overhead controllable and volume variances; overhead variance report LO P4 Blaze Corp. applies overhead on the basis of direct labor hours. For the month of March, the company planned production of 10,000 units (80% of its production capacity of 12,500 units) and prepared the following budget. Operating Levels 80% 10,000 32,000 Overhead Budget Production in units Standard direct labor hours Budgeted overhead Variable overhead costs Indirect materials Indirect labor Power M Maintenance ***** Total variable costs 104 Fixed overhead costs Rent of factory building Depreciation Machinery Taxes and insurance Supervisory salaries Total fixed costs $ 19,200 25,600 12,000 7,200 64,000 20,000 30,000 2,900 27,100 80,000 Total overhead costs $144,000 During March, the company operated at 90% capacity (11,250 units), and it incurred the following actual overhead costs. Overhead costs (actual) Indirect materials Indirect labor Power Maintenance Rent of factory building Depreciation-Machinery Taxes and insurance Supervisory salaries Total actual overhead costs $ 19,200 25,600 13,500 8,925 20,000 27,300 3,650 30,000 $ 148, 175 1. Compute the overhead controllable variance. 2. Compute the overhead volume variance. 3. Prepare an overhead variance report at the actual activity level of 9,000 units. 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. (Indicate the effect of each variance by selecting for favorable, unfavorable, and no variance. Do not round intermediate calculations.) Controllable Variance Total actual overhead Flexible budget overhead Total 0 Overhead controllable variance 1. Compute the overhead controllable variance. 2. Compute the overhead volume variance. 3. Prepare an overhead variance report at the actual activity level of 9,000 units. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Compute the overhead volume variance. Classify as favorable or unfavorable. (Indicate the effect of each variance by selecting for favorable, unfavorable, and no variance. Do not round intermediate calculations.) Volume Variance Volume variance Required 1 Required 2 Required 3 Prepare an overhead variance report at the actual activity level of 9,000 units. Classify as favorable or unfavorable. (Indicate the effect of each variance by selecting for favorable, unfavorable, and no variance. Do not round intermediate calculations.) BLAZE CORP. Overhead Variance Report For Month Ended March 31 Expected production volume Production level achieved Volume variance Controllable Variance Flexible Budget Actual Results Variances Fav. / Unfav. Variable overhead costs: Fixed overhead costs: Total overhead costs