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Question - 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 130,000 units requiring 520,000 direct labor hours. (Practical capacity is 540,000 hours.) Annual budgeted overhead costs total $858,000, of which $603,200 is fixed overhead. A total of 119,000 units using 518,000 direct labor hours were produced during the year. Actual variable overhead costs for the year were $261,100, and actual fixed overhead costs were $555,450.
Required -
1. Compute the fixed overhead spending and volume variances.
2. Compute the variable overhead spending and efficiency variances. Do not round intermediate calculations.
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