Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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

image text in transcribed

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 130,000 units requiring 520,000 direct labor hours. (Practical capacity is 540,000 hours.) Annual budgeted overhead costs total $858,000, of which $613,600 is fixed overhead. A total of 119,300 units using 518,000 direct labor hours were produced during the year. Actual variable overhead costs for the year were $260,900, and actual fixed overhead costs were $555,750. Required: 1. Compute the fixed overhead spending and volume variances. Fixed Overhead Spending Variance $ Fixed Overhead Volume Variance 2. Compute the variable overhead spending and efficiency variances. Do not round intermediate calculations Variable Overhead Spending Variance $ Variable Overhead Efficiency Variance

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Defensive Estimating Protecting Your Profits

Authors: William Asdal

1st Edition

0867186208, 978-0867186208

More Books

Students also viewed these Accounting questions

Question

What should Dons next steps be? FPE.*

Answered: 1 week ago