Overhead Variances, Four-Variance Analysis, Journal Entries Janson, Inc., uses a standard costing system. The predetermined overhead rates are calculated using practical capacity. Practical capacity for a year is defined as 100,000 units requiring 20,000 standard direct labor hours. Budgeted overhead for the year is $76,000, of which $30,000 is fixed overhead. During the year, 96,000 units were produced using 19,000 direct labor hours. Actual annual overhead costs totaled $80,000, of which $29,600 is fixed overhead. Required: 1. Calculate the fixed overhead spending and volume variances. Fixed Overhead Spending Variance 400 Favorable Fixed Overhead Volume Variance -1,200 Unfavorable 2. Calculate the variable overhead spending and efficiency variances. Variable Overhead Spending Variance 6,700 Unfavorable Variable Overhead Efficiency Variance 460 Favorable Feedback Check My Work 1. The formula for computing the fixed overhead variances are as follows (AFOH = Actual fixed overhead and BFOH = Budgeted fixed overhead): Fixed OH spending variance = AFOH -BFOH, and the volume variance = Budgeted fixed OH - Applied fixed OH. (Actual variable OH rate (AVOR) - (SVOR) Standard variable OH rate) x AH. Variable overhead efficiency variance = (AH-SH) x SVOR. 2. Variable overhead spending variance =