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 Depreciation-Machinery 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 (actual) Indirect materials $ 15,600 Indirect labor 28,800 Power 8,775 Maintenance 3,555 Rent of factory building 22,800 Depreciation Machinery 10,700 Supervisory salaries 25, 200 Total actual overhead costs $114,630 1. Compute the overhead controllable variance and classify it as favorable or unfavorable. 2. Compute the overhead volume variance and classify it as favorable or unfavorable. 3. Prepare an overhead variance report at the actual activity level of 11.250 units, 57 Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Compute the overhead controllable variance and classify it as favorable or unfavorable. (Indicate the effect of each variance by selecting for favorable, unfavorable, and no variance.) Controllable variance Total actual overhead Flexible budget overhead Total Overhead controllable variance Required Required 2 > Required 1 Required 2 Required 3 Compute the overhead volume variance and classify it 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 Prepare an overhead variance report at the actual activity level of 11,250 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.) JAMES CORP. Overhead Variance Report For Month Ended May 31 Expected production volume Production level achieved Volume variance Controllable Variance Variable overhead costs: Flexible Budget Actual Results Variances Fav./Unfav. Fixed overhead costs: Total overhead costs