Levelor Company's flexible budget shows $10,750 of overhead at 75% of capacity, which was the operating level achieved during May. However, the company applied overhead to production during May at a rate of $2.10 per direct labor hour based on a budgeted operating level of 6,160 direct labor hours (90% of capacity). If overhead actually incurred was $11,227 during May, the controllable variance for the month was: 09 Multiple Choice $2,186 unfavorable. $1,709 favorable. $477 unfavorable. $2,186 favorable. $477 favorable.