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eBook Overhead Variances, Two- And Three-Variance Analyses Oerstman, Inc., uses a standard costing system and develops its ov
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Compute Overhead Variance Using a Two Variance Analysis
Particular Amount
Actual Overhead ( $241,900+$555,750) 797,650
Budgeted Overhead(SVORX SH+Fixed OH)
((767,880-549,180)/121,500*119,200)+549,180
763,740
Applied Overhead (119200X767,880/121,500 753,344
Budgeted Variance= Actual Overhed -Budgeted Overhead

$797,650-$763,740=

33,910
Volume Overhead= Appplied Overhead- Budgeted Overhead
$753,344-$763,740= 10,396
Compute Overhead Variance Using a Three Variance Analysis
Particular Amount
Actual Overhead ( $241,900+$555,750) 797,650
Budgeted Fixed Overhead(SVORX AH)
((767,880-549,180)/486,000*484,000)+549,180
766,980
Budgeted Fixed Overhead(SVORX SH+Fixed OH)
((767,880-549,180)/121,500*119,200)+549,180
763,740
Applied Overhead (119,200X767,880/121,500 753,344
Sepnding Variance= Actual Overhed -Budgeted Fixed Overhead
=(797,650-766,980)= $30,670UF
Efficiency Overhead= Budgeted Fxed Overhead- Budged fixed Standard OH
(766,980-763,740)= $3,240 UF
Volume Variance=Applied Overhead-Budgeted Overhead
(763,740-753,344)=$10,396 UF
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