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 134,000 units requiring 535,000 direc

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 134,000 units requiring 535,000 direct labor hours. practical capacity is 540,000 hours. annual budgeted overhead costs total $848,380, of which $612,760 is fixed overhead. a total of 128,750 units using 540,100 direct labor hours were produced during the year. actual variable overhead costs for the year were $251,080, and actual fixed overhead costs were $601,900.