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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 123,500 unds requiring 494,000 direct labor hours (Practical capacty is 514,000 hours.) Annual budgeted overhead costs total $770,640, of which $548, 340 is fixed overhead. A total of 119,200 units using 492,000 direct labor hours were produced during the year. Actual variable overhead costs for the year were $241,100, and actual fixed overhead costs were $555,300. Requiredi 1. Compute overhead varances using a two variance analysis, Builget Variance Volumme Variance 2. Compute owerhead variances using a three variance analysis. Spending Variance Efficiency Variance Volurme Variance

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 123,500 unds requiring 494,000 direct labor hours (Practical capacty is 514,000 hours.) Annual budgeted overhead costs total $770,640, of which $548, 340 is fixed overhead. A total of 119,200 units using 492,000 direct labor hours were produced during the year. Actual variable overhead costs for the year were $241,100, and actual fixed overhead costs were $555,300. Requiredi 1. Compute overhead varances using a two variance analysis, Builget Variance Volumme Variance 2. Compute owerhead variances using a three variance analysis. Spending Variance Efficiency Variance Volurme Variance

Managerial Accounting: The Cornerstone of Business Decision-Making
Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter10: Standard Costing And Variance Analysis
Section: Chapter Questions
Problem 72P: Moleno Company produces a single product and uses a standard cost system. The normal production...
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Overhead Vartances, Two- And Three Vanance 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 123,500 unts requiring 494,000 direct labor hours (Practical capacity is 514,000 hours.) Annual budgeted overhead costs total $770,640, of which $548,340 is fixed overhead. A total of 119,200 units using 492.000 direct labor hours were produced during the year. Actual variable overhead costs for the year were $241,100, and actual fixed overhead costs were 1555,300. Requiredi 1. Compute overhead varances usng a two variance analysis, Budget Variance Volume Variance 2. Compute owerhead variances using a three variance analysis. Spending Variance Efficiency Variance Volume Variance
Transcribed Image Text:Overhead Vartances, Two- And Three Vanance 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 123,500 unts requiring 494,000 direct labor hours (Practical capacity is 514,000 hours.) Annual budgeted overhead costs total $770,640, of which $548,340 is fixed overhead. A total of 119,200 units using 492.000 direct labor hours were produced during the year. Actual variable overhead costs for the year were $241,100, and actual fixed overhead costs were 1555,300. Requiredi 1. Compute overhead varances usng a two variance analysis, Budget Variance Volume Variance 2. Compute owerhead variances using a three variance analysis. Spending Variance Efficiency Variance Volume Variance
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