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 120,000 units requiring 480,000 direct labor hours. (Practical capacity is 500,000 hours.) Annual budgeted overhead costs total $748,800, of which $532,800 is fixed overhead. A total of 119,500 units using 478,000 direct labor hours were produced during the year. Actual variable overhead costs for the year were $241,900, and actual fixed overhead costs were $555,000. 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 Efficiency Variance Volume Variance

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 120,000 units requiring 480,000 direct labor hours. (Practical capacity is 500,000 hours.) Annual budgeted overhead costs total $748,800, of which $532,800 is fixed overhead. A total of 119,500 units using 478,000 direct labor hours were produced during the year. Actual variable overhead costs for the year were $241,900, and actual fixed overhead costs were $555,000. 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 Efficiency Variance Volume Variance

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Description: Overhead Variances, Two- And Three-Variance AnalysesOerstman, 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 di

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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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 126,000 units requiring 504,000 direct labor hours. (Practical capacity is 524,000 hours.) Annual budgeted overhead costs total $846,720, of which $599,760 is fixed overhead. A total of 119,400 units using 502,000 direct labor hours were produced during the year. Actual variable overhead costs for the year were $260,500, and actual fixed overhead costs were $556,050. Required: 1. Compute the fixed overhead spending and volume variances. Fixed Overhead Spending Variance Fixed Overhead Volume Variance. 2. Compute the variable overhead spending and efficiency variances. Do not round intermediate calculations Variable Overhead Spending Variance. Variable Overhead Efficiency Variance
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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 $748,440, of which $544,320 is fixed overhead. A total of 119,200 units using 484,000 direct labor hours were produced during the year. Actual variable overhead costs for the year were $240,100, and actual fixed overhead costs were $555,300. Required: 1. Compute overhead variances using a two-variance analysis. Budget Variance $ Unfavorable Volume Variance $ Unfavorable 2. Compute overhead variances using a three-variance analysis. Spending Variance $ Unfavorable Efficiency Variance $ Unfavorable Volume Variance $ Unfavorable
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Overhead Variances, Two- And Three-Variance Analyses
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Yourtube Company uses a standard cost system and prepared the following budget at normal capacity for the month of January. Direct labor hours Variable factory overhead Fixed factory overhead Total factory overhead per DLH 24,000 $48,000 $108,000 $6.50 Actual data for January were as follows: 22,000 Total factory overhead $147,000 Direct labor hours worked Standard DLH allowed for the capacity attained 21,000 Using the two-way analysis of overhead variances, what is the budget (controllable) variance for January? A. $3,000. B. $13,500 unfavorable. C. $9,000 favorable. D. $10,500 unfavorable.
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