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Dverhead Variances, Four-Variance Analysis Derstman, Inc., uses a standard costing system and develops its overhead rates from the current annual budget. The budget is based

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Dverhead Variances, Four-Variance Analysis Derstman, Inc., uses a standard costing system and develops its overhead rates from the current annual budget. The budget is based on an expectec annual output of 126,000 units requiring 504,000 direct labor hours. (Practical capacity is 524,000 hours.) Annual budgeted overhead costs total $841,680, of which $594,720 is fixed overhead. A total of 119,400 units using 502,000 direct labor hours were produced during the year. Actual variable overhead costs for the year were $260,800, and actual fixed overhead costs were $555,050. Required: 1. Compute the fixed overhead spending and volume variances. 2. Compute the variable overhead spending and efficiency variances. Do not round intermediate calculations Variable overhead Spending Variance Variable Overhead Efficiency Variance 1 Fenthan vowem, was 1. The four-variance method calculates two variances for variable overhead and two variances for fixed overhead. 2. The four-variance metiod caiculates two variances for variable overhead and two variances for fixed overtiead

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