Sunday Corporation prepared the following performance report for variable overhead costs for the last quarter of the year. Machine hours are the cost driver for all overhead costs.

Cost Driver (Machine Hours) Variable Overhead Cost:	Actual 38,000	Static Budget 35,000	Variances
Utilities	$15,700	$14,000	41,700 U
Indirect Labor	86,500	80,500	6,000 U
Supplies	26,000	21,000	5,000 U
Maintenance	44,900	42,000	2,900 U
Total Variable overhead costs	$173,100	$157,500	$15,600 U

Cost Formulas used for the variable overhead costs are:

Variable overhead costs	Cost Formula
Utilities	$0.40 per machine hour
Indirect labor	$2.30 per machine hour
Supplies	$0.60 per machine hour
Maintenance	$1.20 per machine hour

Your boss called you into the office and reprimanded you for the unfavorable variances. The boss says you are fired unless you can explain why the variances are all unfavorable.

Required:

Calculate the flexible budget variances and the activity-level variances for each cost.