Alternate three-variance overhead analysis: materials application base Overton Company uses a three-variance method of analyzing overhead variances. The company reports spending, efficiency, and capacity variances for overhead. Budgeted manufacturing overhead for the year is $400,000 of which $250,000 is fixed overhead. The company applies overhead based on a percent- age of standard direct materials cost. The company bases its overhead rate on a normal production capacity that requires $1,000,000 of direct materials at standard. On December 31, Overton Company had a balance of $384,000 in its manufacturing overhead control account. During the year $965,000 of material was put into production. The standard amount of materials required for the production output was $950,000.

REQUIRED Prepare an alternate three-variance analysis of overhead.