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 28,000 Standard direct labor hours Budgeted overhe ad Variable overhead costs $ 15,400 Indirect materials Indirect labor 28,000 7,000 5,600 Power Maintenance Total variable costs 56,000 Fixed overhead costs Rent of factory building Depreciation-Machinery Supervisory salaries Total fixed costs 24,000 10,900 15,500 50,400 $106,400 Total overhead costs During May, the company operated at 90% capacity (11,250 units) and incurred the following actual overhead costs: Overhead Costs $ 15,400 30,950 Indirect materials Indirect labor Power 7,875 6,940 Maintenance Rent of factory building Depreciation-Machinery Supervisory salaries 24,000 10,900 19,000 $115,065 Total actual overhead costs 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 Required 2 Required Required 3 Compute the overhead controllable variance. Classify as favorable or unfavorable. Controllable variance Total actual overhead Flexible budget overhead Total Overhead controllable variance Required 2 Compute the overhead volume variance. Classify as favorable or unfavorable. (Do not round intermediate calculations.) Volume Variance Volume variance Prepare an overhead variance report at the actual activity level of 11,250 units. Classify as favorable or unfavorable. (Do not round intermediate calculations.) JAMES CORP. Overhead Variance Report For Month Ended May 31 Expected production volume Production level achieved Volume variance Actual Flexible Budget Variances Controllable Variance Fav/Unfav. Results Variable overhead costs: Fixed overhead costs: Total overhead costs