Exercise $9\mathrm{.}16($Algorithmic$)$

Overhead Variances, Two$-$ And Three$-$Variance AnalysesOerstman, 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 $123,000$ units requiring $492,000$

direct labor hours. $($Practical capacity is $512,000$ hours.$)$ Annual

budgeted overhead costs total $$816,720,$ of which $$575,640$ is fixed

overhead. A total of $119,100$ units using $490,000$ direct labor hours

were produced during the year. Actual variable overhead costs for

the year were $$260,300,$ and actual fixed overhead costs were

$$556,050.$Required:$1.$Compute overhead variances using a

two$-$variance analysis$\mathrm{.}2.$Compute overhead variances using a

three$-$variance analysis.