Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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

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 128,000 units requiring 512,000 direct labor hours. (Practical capacity is 532,000 hours.) Annual budgeted overhead costs total $839,680, of which $604,160 is fixed overhead. A total of 119,500 units using 510,000 direct labor hours were produced during the year. Actual variable overhead costs for the year were $261,700, and actual fixed overhead costs were $555,950.

Required:

1.Compute the fixed overhead spending and volume variances.

Fixed Overhead Spending Variance$______ & - Select your answer -Favorable/Unfavorable

Fixed Overhead Volume Variance$______ & - Select your answer -Favorable/Unfavorable

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

Variable Overhead Spending Variance$_____ & - Select your answer -Favorable/Unfavorable

Variable Overhead Efficiency Variance$_____ & - Select your answer -Favorable/Unfavorable

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

Payroll Accounting 2018

Authors: Jeanette Landin, Paulette Schirmer

4th edition

1260005127, 1259742514, 1260005165, 126000516X, 978-1259742514

More Books

Students also viewed these Accounting questions

Question

1. Information that is currently accessible (recognition).

Answered: 1 week ago