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 119,000 units using 506,000 direct labor hours were produced during the year. Actual variable overhead costs for the year were $260,400, and actual fixed overhead costs were $555,550.  Compute the fixed overhead spending and volume variances. Fixed Overhead Spending Variance Favorable or Unfavorable   Fixed Overhead Volume Variance Favorable or Unfavorable   2. Compute the variable overhead spending and efficiency variances. Do not round intermediate calculations Variable Overhead Spending Variance Favorable or Unfavorable   Variable Overhead Efficiency Variance Favorable or Unfavorable

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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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 119,000 units using 506,000 direct labor hours were produced during the year. Actual variable overhead costs for the year were $260,400, and actual fixed overhead costs were $555,550.

 Compute the fixed overhead spending and volume variances.

Fixed Overhead Spending Variance Favorable or Unfavorable  
Fixed Overhead Volume Variance Favorable or Unfavorable  

2. Compute the variable overhead spending and efficiency variances. Do not round intermediate calculations

Variable Overhead Spending Variance Favorable or Unfavorable  
Variable Overhead Efficiency Variance Favorable or Unfavorable  
     
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