Overhead Variances, FourVariance 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
units requiring direct labor hours. Practical capacity is hours. Annual budgeted overhead costs total $ of which $ is fixed
overhead. A total of units using direct labor hours were produced during the year. Actual variable overhead costs for the year were $ and actual
fixed overhead costs were $
Required:
Compute the fixed overhead spending and volume variances.
Fixed Overhead Spending Variance
Fixed Overhead Volume Variance
Compute the variable overhead spending and efficiency variances. Do not round intermediate calculations
Variable Overhead Spending Variance $
Variable Overhead Efficiency Variance
V
