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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: Overhead Budget Production in units Standard direct labor hours Budgeted overhead Variable overhead costs Indirect materials Operating Levels 80% 10,000 25,000 Indirect labor Power $ 15,000 25,000 7,000 3,000 50,000 Maintenance Total variable costs Fixed overhead costs Rent of factory building Depreciation-Machinery Supervisory salaries Total fixed costs 25,000 11,000 14,000 50,000 Total overhead costs $100,000 During May, the company operated at 90% capacity (11,250 units) and incurred the following actual overhead costs: Overhead costs (actual) Indirect materials Indirect labor Power Maintenance Rent of factory building Depreciation-Machinery Supervisory salaries Total actual overhead costs $ 15,000 27,725 7,875 4,020 25,000 11,000 17,600 $108, 220 1. Compute the overhead controllable variance and classify it as favorable or unfavorable. 2. Compute the overhead volume variance and classify it as favorable or unfavorable. 3. Prepare an overhead varlance report at the actual activity level of 11,250 units. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Compute the overhead controllable variance and classify it as favorable or unfavorable. (Indicate the effect of each variance by selecting for favorable, unfavorable, and no variance.) Controllable variance Total actual overhead Flexible budget overhead Variable Fixed Total 0 Overhead controllable variance 1. Compute the overhead controllable variance and classify it as favorable or unfavorable. 2. Compute the overhead volume variance and classify it as favorable or unfavorable. 3. Prepare an overhead varlance report at the actual activity level of 11,250 units. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Compute the overhead volume variance and classify it as favorable or unfavorable. (Indicate the effect of each variance by selecting for favorable, unfavorable, and no variance. Do not round intermediate calculations.) Volume Variance Total fixed overhead applied Total budgeted fixed OH Volume variance 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 Expected production volume For Month Ended May 31 80% of capacity 90% of capacity Favorable Production level achieved Volume variance Controllable Variance Flexible Budget Actual Results Variances Fav./Unfav. Variable overhead costs: Indirect materials S 15,000 Power Maintenance Total variable costs 15,000 Fixed overhead costs: Rent of factory building Depreciation-Machinery Supervisory salaries Total fixed costs Total overhead costs

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