Overhead Variances, TWO- And Three-Variance Analyses 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 121,500 units requiring 486,000 direct labor hours. (Practical capacity is 506,000 hours.) Annual budgeted overhead costs total 5758,160, of which $539,460 is Mixed overhead. A total of 119,500 units using 184,000 direct labor hours were produced during the year. Actual variable ever and costs for the year were $241,200, and actual fixed overhead costs were $555,750. Required: 1. Compute overhead variances using a two variance analysis. Budget Variance Volume Variance 2. Compute overhead variances using a three-variance analysis Spending Variance Ericiency Variance Volume Variance