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. Overhead Budget Production in units Standard direct labor hours Budgeted overhead Variable overhead costs. Indirect materials Indirect labor Power Maintenance Total variable costs Operating Levels 80% 10,000 27,000 $ 16,200 27,000 5,400 5,400 54,000 Fixed overhead costs Rent of factory building 23,000 Depreciation-Machinery Supervisory salaries Total fixed costs Total overhead costs 10,800 14,800 48,600 $102,600