James Corp. applies overhead on the basis of direct labor hours. For the month of May, the company planned production of 10,000 units (80% of its production capacity of 12,500 units) and prepared the following overhead budget:

	Operating Levels
Overhead Budget	80%
Production in units		10,000
Standard direct labor hours		26,000
Budgeted overhead
Variable overhead costs
Indirect materials	$	15,600
Indirect labor		26,000
Power		7,800
Maintenance		2,600
Total variable costs		52,000
Fixed overhead costs
Rent of factory building		22,000
DepreciationMachinery		10,700
Supervisory salaries		21,900
Total fixed costs		54,600
Total overhead costs	$	106,600

During May, the company operated at 90% capacity (11,250 units) and incurred the following actual overhead costs:

Overhead Costs
Indirect materials	$	15,600
Indirect labor		28,800
Power		8,775
Maintenance		3,555
Rent of factory building		22,000
DepreciationMachinery		10,700
Supervisory salaries		25,200
Total actual overhead costs	$	114,630

1. Compute the overhead controllable variance. 2. Compute the overhead volume variance. 3. Prepare an overhead variance report at the actual activity level of 11,250 units.