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 $123,000$ units requiring $492,000$ direct labor hours. $($Practical capacity is $512,000$ hours.$)$ Annual budgeted overhead costs total $$762,600,$ of which $$546,120$ is fixed overhead. A total of $119,000$ units using $490,000$ direct labor hours were produced during the year. Actual variable overhead costs for the year were $$241,300,$ and actual fixed overhead costs were $$555,150.$

Required:

$1.$ Compute overhead variances using a two$-$variance analysis.

Budget Variance $fill in the blank $1$

$40,890$

Unfavorable

Volume Variance $fill in the blank $3$

$17,760$

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 $9$

$17,760$

Unfavorable

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