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cornerstone management

Overhead Variances, Two- And Three-Variance Analyses Oerstman, Inc., uses a standard costing system and develops its overhead rates from the current annual budget. The budget is based on an expected annual output of 120,000 units requiring 480,000 direct labor hours. (Practical capacity is 500,000 hours.) Annual budgeted overhead costs total $729,600, of which $537,600 is fixed overhead. A total of 119,400 units using 478,000 direct labor hours were produced during the year. Actual variable overhead costs for the year were $240,300, and actual fixed overhead costs were $555,750 Required: 1. Compute overhead variances using a two-variance analysis, Budget Variance Volume Variance Unfavorable Unfavorable 2. Compute overhead variances using a three-variance analysis. $ Spending Variance Efficiency Variance Volume Variance