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 125,000 units requiring 500,000 direct labor hours. (Practical capacity is 520,000 hours.) Annual budgeted overhead costs total $825,000, of which $595,000 is fixed overhead. A total of 119,300 units using 498,000 direct labor hours were produced during the year. Actual variable overhead costs for the year were $261,300, and actual fixed overhead costs were $555,450.

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

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

Internet Fraud Casebook

Authors: Joseph T. Wells

1st Edition

0470643633, 9780470643631

More Books

Students also viewed these Accounting questions

Question

6. Are my sources reliable?

Answered: 1 week ago

Question

5. Are my sources compelling?

Answered: 1 week ago