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World Company expects to operate at 80% of its productive capacity of 56,250 units per month. At this planned level, the company expects to use

World Company expects to operate at 80% of its productive capacity of 56,250 units per month. At this planned level, the company expects to use 27,900 standard hours of direct labor. Overhead is allocated to products using a predetermined standard rate of 0.620 direct labor hour per unit. At the 80% capacity level, the total budgeted cost includes $69,750 fixed overhead cost and $320,850 variable overhead cost. In the current month, the company incurred $361,000 actual overhead and 24,900 actual labor hours while producing 40,000 units. (1) Compute the overhead volume variance. Classify each as favorable or unfavorable. (2) Compute the overhead controllable variance. Classify each as favorable or unfavorable.

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