James Corp. applies overhead on the basis of direct labor hours. For the month of May, the company planned production of 8,000 units (80% of its production capacity of 10,000 units) and prepared the following overhead budget: Operating Levels
Overhead Budget 80%
Production in units 8,000
Standard direct labor hours 24,000
Budgeted overhead
Variable overhead costs
Indirect materials $15,000
Indirect labor 24,000
Power 6,000
Maintenance 3,000
Total variable costs 48,000
Fixed overhead costs
Rent of factory building 15,000
Depreciation—machinery 10,000
Supervisory salaries 19,400
Total fixed costs 44,400
Total overhead costs $92,400

During May, the company operated at 90% capacity (9,000 units) and incurred the following actual overhead costs:

Overhead Costs
Indirect materials $15,000
Indirect labor 26,500
Power 6,750
Maintenance 4,000
Rent of factory building 15,000
Depreciation—machinery 10,000
Supervisory salaries 22,000
Total actual overhead costs $99,250

Required:
a. Compute the overhead controllable variance.
b. Compute the overhead volume variance.
c. Prepare an overhead variance report at the actual activity level of 9,000 units.