Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. overhead variances, four-variance analysis oerstma

Overhead Variances, Four-Variance Analysis Oerstman, Inc., uses a standard costing system and develops its overhead...

50.1K

Verified Solution

Question

Accounting

image
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 120,000 units requiring 480,000 direct labor hours. (Practical capacity is 500,000 hours.) Annual budgeted overhead costs total $787,200, of which $556,800 is fixed overhead. A total of 119,400 units using 478,000 direct labor hours were produced during the year. Actual variable overhead costs for the year were $230,000, and actual fixed overhead costs were $556,250. 1. Compute the fixed overhead spending and volume variances. How would you interpret the spending variance? Discuss the possible interpretations of the volume variance. Which is most appropriate for this example? 2. Compute the variable overhead spending and efficiency variances. How is the variable over- head spending variance like the price variances of direct labor and direct materials? How is it different? How is the variable overhead efficiency variance related to the direct labor efficiency variance

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Zin AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Q

3. The following information is provided by a dealer in computer chips. The dealer follows FIFO...

Finance
Q

What is the difference between sex and gender? Describe the development of gender awareness in young children,...

Psychology
Q

A neutron star has a mass of 3.35 × 1030 kg (about the mass of our...

Physics
Q

Steam is compressed by an adiabatic compressor from 3 bar and 160°C to 10 bar and...

Mechanical Engineering
Q

If the number of Lego bricks were averaged out among the world’s population, each person would...

General Management
Q

A small body of mass 10grams is making harmonic oscillations along a straight line with...

Physics
Q

Monthly Expenditures Apre 28 00 Car Loan 200 00 Electricity 44 00 Mortgage 1000 00...

Geometry
Q

Find the intercepts and then use them to graph the equation 4x 2y 8 CODE...

Basic Math
Q

etermine the points of discontinuity for the function f x 2 4x x 2 3x

Basic Math
Q

A company that produces a single product wants to determine its production, inventory holding and...

Accounting
Q

Complete the following tasks mentioned in the "complete the following tasks" excel spreadsheet. Update the...

Accounting
Q

Which of the following are ways to estimate the cost of equity for a company...

Finance