Overhead Variances, Four Variance Analysis 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 $796,800, of which $571,200 is fixed overhead A total of 119,300 units using 478,000 direct labor hours were produced during the year Actual variable overhead costs for the year were $260,900, and actual fixed overhead costs were $555,150 Required 1 Compute the fixed overhead spending and volume variances Fixed Overhead Spending Variance $ Favorable Unfavorable Fixed Overhead Volume Variance $ Favorable Unfavorable 2 Compute the variable overhead spending and efficiency variances Do not round intermediate calculations Variable Overhead Spending Variance $ Favorable Unfavorable Variable Overhead Efficiency Variance $ Favorable Unfavorable

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Overhead Variances, Four Variance Analysis 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 $796,800, of which $571,200 is fixed overhead  A total of 119,300 units using 478,000 direct labor hours were produced during the year  Actual variable overhead costs for the year were $260,900, and actual fixed overhead costs were $555,150  Required  1  Compute the fixed overhead spending and volume variances  Fixed Overhead Spending Variance $ Favorable Unfavorable Fixed Overhead Volume Variance $ Favorable Unfavorable 2  Compute the variable overhead spending and efficiency variances  Do not round intermediate calculations Variable Overhead Spending Variance $ Favorable Unfavorable Variable Overhead Efficiency Variance $ Favorable Unfavorable

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

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Fixed Overhead Spending Variance	$	Favorable Unfavorable
Fixed Overhead Volume Variance	$	Favorable Unfavorable

Variable Overhead Spending Variance	$	Favorable Unfavorable
Variable Overhead Efficiency Variance	$	Favorable Unfavorable