mation.com M. Hinc Car Care HCP MARRON work Chapter 8 0 Help Sa Exercise 08-21 Overhead controllable and volume variances; overhead variance report LO P4 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 Tree Overhead udges BOB Production in unita 10,000 Standard direct labor hours 36,000 Budgeted overhead Variable overhead costs Indirect materials $ 21.600 Indirect labor 36.000 Power 7.200 Malta 2500 Total variable cont 68.400 Fixed overhead out Rent of factory building 20.000 Depreciation-achinery 11.700 Supervisory salaries 29.500 Total Eixed costs 61,200 Total overhead costs $129.600 During May, the company operated at 90% capacity (11.250 units) and incurred the following actual overhead costs Overhead costs actual Indirect materiala $ 23,600 Indirect labor 40,150 Power 8,100 Maintenance 4.675 Rent of factory building 20,000 Depreciation Machinery 11,700 Supervisory salaries 32,200 Total actual overhead costs $139,125 1. Compute the overhead controllable variance and classify it as favorable or unfavorable, MacBook Air Required 1 Required 2 Required 3 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 80% of capacity 90% of capacity $ 7,650 Favorable Flexible Budget Actual Results Variances Fav./Unfav. Expected production volume Production level achieved Volume variance Controllable Variance Variable overhead costs: Indirect materials Indirect labor Power Maintenance Total variable costs Fixed overhead costs: Rent of factory building Depreciation Machinery Supervisory salaries Total fixed costs Total overhead costs