Question
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 127,000 units requiring 508,000 direct labor hours. (Practical capacity is 528,000 hours.) Annual budgeted overhead costs total $833,120, of which $604,520 is fixed overhead. A total of 119,400 units using 506,000 direct labor hours were produced during the year. Actual variable overhead costs for the year were $260,300, and actual fixed overhead costs were $556,050.
Required:
1. Compute the fixed overhead spending and volume variances. determine if favorable or unfavorable
Fixed Overhead Spending Variance | $ | |
Fixed Overhead Volume Variance | $ |
2. Compute the variable overhead spending and efficiency variances. Do not round intermediate calculations. determine if favorable or unfavorable
Variable Overhead Spending Variance | $ | |
Variable Overhead Efficiency Variance | $ |
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