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 120,000 units requiring 480,000 direct labor hours. (Practical capacity is 500,000 hours.) Annual budgeted overhead costs total $748,800, of which $542,400 is fixed overhead. A total of 119,300 units using 478,000 direct labor hours were produced during the year. Actual variable overhead costs for the year were $241,300, and actual fixed overhead costs were $556,200.

Required: 1. Compute overhead variances using a two-variance analysis. Budget Variance $fill in the blank 1 Unfavorable Volume Variance $fill in the blank 3 3,164 Unfavorable

2. Compute overhead variances using a three-variance analysis. Spending Variance $fill in the blank 5 Unfavorable Efficiency Variance $fill in the blank 7 Unfavorable Volume Variance $fill in the blank 9 Unfavorable