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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: Operating Levels Overhead Budget Production in units 80% 10,000 26,000 Standard direct labor hours Budgeted overhead Variable overhead costs Indirect materials $18,200 26,000 5,200 2,600 52,000 Indirect labor Power Maintenance Total variable costs Fixed overhead costs Rent of factory building Depreciation-Machinery Supervisory salaries Total fixed costs 19,000 11,600 16, 200 46,800 $98,800 Total overhead costs During May, the company operated at 90% capacity (11,250 units) and incurred the following actual overhead costs: Overhead costs (actual) $ 18,200 28,950 5,850 3,745 19,000 11,600 19,300 Total actual overhead costs $106,645 Indirect materials Indirect 1abor Power Maintenance Rent of factory building Depreciation-Machinery Supervisory salaries 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 variance report at the actual activity level of 11,250 units. Complete this question by entering your answers in the tabs below. Required 2 Required 1 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 Total Overhead controllable variance 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 Volume variance 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 Expected production volume Production level achieved Volume variance Flexible Budget Controllable Variance Actual Results Variances Fav./Unfav. Variable overhead costs: Fixed overhead costs: Total overhead costs

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