Overhead Variances, Four-Variance Analysis

1. 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 $603,200 is fixed overhead. A total of 119,400 units using 518,000 direct labor hours were produced during the year. Actual variable overhead costs for the year were $261,900, and actual fixed overhead costs were $556,250.

   Required:

   1. Compute the fixed overhead spending and volume variances.

   Fixed Overhead Spending Variance	$fill in the blank 1
   Fixed Overhead Volume Variance	$fill in the blank 3

   2. Compute the variable overhead spending and efficiency variances. Do not round intermediate calculations

   Variable Overhead Spending Variance	$fill in the blank 5
   Variable Overhead Efficiency Variance	$fill in the blank 7