James Corp. applies overhead on the basis of direct labor hours. For the month of May, the company planned production of 8,000 units (80% of its production capacity of 10,000 units) and prepared the following overhead budget:

	Operating Levels
Overhead Budget	80%
Production in units		8,000
Standard direct labor hours		32,000
Budgeted overhead
Variable overhead costs
Indirect materials	$	22,400
Indirect labor		32,000
Power		6,400
Maintenance		3,200
Total variable costs		64,000
Fixed overhead costs
Rent of factory building		16,000
Depreciationmachinery		11,300
Supervisory salaries		30,300
Total fixed costs		57,600
Total overhead costs	$	121,600

During May, the company operated at 90% capacity (9,000 units) and incurred the following actual overhead costs:

Overhead Costs
Indirect materials	$	22,400
Indirect labor		35,850
Power		7,200
Maintenance		4,405
Rent of factory building		16,000
Depreciationmachinery		11,300
Supervisory salaries		33,100
Total actual overhead costs	$	130,255

Compute the overhead controllable variance.

Total actual overhead		$130,255
Flexible budget overhead
Variable
Fixed	57,600
Total		57,600
Overhead controllable variance			Unfavorable

Compute the overhead volume variance. (Do not round intermediate calculations.)

Volume Variance
Total fixed overhead applied
Total budgeted fixed OH	57,600
Volume variance

Prepare an overhead variance report at the actual activity level of 9,000 units.

JAMES CORP.

Overhead Variance Report

For Month Ended May 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