FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
Bartleby Related Questions Icon

Related questions

Question
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
expand button
Transcribed Image Text: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
SAVE
AI-Generated Solution
AI-generated content may present inaccurate or offensive content that does not represent bartleby’s views.
bartleby
Unlock instant AI solutions
Tap the button
to generate a solution
Click the button to generate
a solution
Knowledge Booster
Background pattern image
Similar questions
Recommended textbooks for you
Text book image
FINANCIAL ACCOUNTING
Accounting
ISBN:9781259964947
Author:Libby
Publisher:MCG
Text book image
Accounting
Accounting
ISBN:9781337272094
Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:Cengage Learning,
Text book image
Accounting Information Systems
Accounting
ISBN:9781337619202
Author:Hall, James A.
Publisher:Cengage Learning,
Text book image
Horngren's Cost Accounting: A Managerial Emphasis...
Accounting
ISBN:9780134475585
Author:Srikant M. Datar, Madhav V. Rajan
Publisher:PEARSON
Text book image
Intermediate Accounting
Accounting
ISBN:9781259722660
Author:J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:McGraw-Hill Education
Text book image
Financial and Managerial Accounting
Accounting
ISBN:9781259726705
Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:McGraw-Hill Education