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

1. Compute the overhead controllable variance. 2. Compute the overhead volume variance. 3. Prepare an overhead variance report at the actual activity level of 9,000 units.

Required 1Required 2 Required 3 Compute the overhead controllable variance. Classify as favorable or unfavorable Controllable variance Total actual overhead Flexible budget overhead Fixed Variable Total 0 Overhead controllable variance nfavorable Required 1Required 2 Required 3 Compute the overhead volume variance. Classify as favorable or unfavorable. (Do not round intermediate calculations.) Volume Variance Total budgeted fixed OH Total fixed overhead applied Volume variance avorable Required 1 Required 2 Reqred 3 Prepare an overhead variance report at the actual activity level of 9,000 units. Classify as favorable or unfavorable. (Do not round intermediate calculations.) JAMES CORP Overhead Variance Report For Month Ended May 31 Expected production volume (80% of capacity 90% of capacity Production level achieved Volume variance Favorable Controllable Variance Flexible Budget Actual ResultsVariances Fav./Unfav Variable overhead costs Indirect labor avorable Indirect materials avorable Power o variance Maintenance nfavorable otal variable costs avorable Fixed overhead costs Rent of factory building o variance Depreciation Machinery o variance Supervisory salaries nfavorable Total fixed costs Unfavorable Total overhead costs Unfavorable