For May, Mariana company planned production of 8,000 units (80% of its production capacity of 10,000 units) and prepared the following overhead budget. The company applies overhead with a standard of 3 DLH per unit and a standard overhead rate of $3.85 per DLH. Overhead Budget Production (in units) Budgeted overhead Variable overhead costs Indirect materials. Indirect labor Power Maintenance Total variable overhead costs Fixed overhead costs Rent of building Depreciation-Machinery Supervisory salaries Total fixed overhead costs Total overhead Actual Overhead Costs Indirect materials Indirect labor Power Maintenance Rent of building Depreciation-Machinery Supervisory salaries. Actual total overhead It actually operated at 90% capacity (9,000 units) in May and incurred the following actual overhead. $ 15,000 26,500 6,750 4,000 808 Operating Level 15,000 10,000 22,000 $ 99,250 8,000 $ 15,000 24,000 6,000 3,000 48,000 15,000 10,000 19,400 44,400 $ 92,400 1. Compute the overhead controllable variance and identify it as favorable or unfavorable. 2. Compute the overhead volume variance and identify it as favorable or unfavorable. 3. Prepare an overhead variance report at the actual activity level of 9,000 units.

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For May, Mariana company planned production of 8,000 units (80% of its production capacity of 10,000 units) and prepared the following overhead budget. The company applies overhead with a standard of 3 DLH per unit and a standard overhead rate of $3.85 per DLH. 80% Operating Level Overhead Budget Production (in unite) Budgeted overhead Variable overhead costs Indirect materials Indirect labor Power Maintenance Total variable overhead costs Fixed overhead costs Rent of building Depreciation-Machinery Supervisory salaries Total fixed overhead costs Total overhead 8,000 $ 15,000 24,000 6,000 3,000 48,000 15,000 10,000 19,400 44,400 $92,400 It actually operated at 90% capacity (9,000 units) in May and incurred the fqllowing actual overhead. Actual Overhead Costs, Indirect materials Indirect labor Power Maintenance Rent of building Depreciation-Machinery Supervisory salaries Actual total overhead $ 15,000 26,500 6,750 4,000 15,000 10,000 22,000 $ 99,250 1. Compute the overhead controllable variance and identify it as favorable or unfavorable. 2. Compute the overhead volume variance and identify it as favorable or unfavorable. 3. Prepare an overhead variance report at the actual activity level of 9,000 units. For May, Mariana company planned production of 8,000 units (80% of its production capacity of 10,000 units) and prepared the following overhead budget. The company applies overhead with a standard of 3 DLH per unit and a standard overhead rate of $3.85 per DLH. 80% Operating Level Overhead Budget Production (in unite) Budgeted overhead Variable overhead costs Indirect materials Indirect labor Power Maintenance Total variable overhead costs Fixed overhead costs Rent of building Depreciation-Machinery Supervisory salaries Total fixed overhead costs Total overhead 8,000 $ 15,000 24,000 6,000 3,000 48,000 15,000 10,000 19,400 44,400 $92,400 It actually operated at 90% capacity (9,000 units) in May and incurred the fqllowing actual overhead. Actual Overhead Costs, Indirect materials Indirect labor Power Maintenance Rent of building Depreciation-Machinery Supervisory salaries Actual total overhead $ 15,000 26,500 6,750 4,000 15,000 10,000 22,000 $ 99,250 1. Compute the overhead controllable variance and identify it as favorable or unfavorable. 2. Compute the overhead volume variance and identify it as favorable or unfavorable. 3. Prepare an overhead variance report at the actual activity level of 9,000 units.