(Four-variance approach; journal entries) Mike Tice Products makes picnic ta¬ bles, swings, and benches. Standard hours allowed for each product are as follows:

The standard variable overhead rate is $4 per direct labor hour; the standard fixed overhead application rate at expected annual capacity is $2 per direct labor hour. Expected monthly capacity is 3,000 direct labor hours.
June production was 100 picnic tables, 400 swings, and 60 benches; production required 3,020 actual direct labor hours. Actual variable and fixed overhead for June were $11,800 and $6,200, respectively.

a. Prepare a variance analysis using the four-variance approach.
(.Hint: Convert the production of each type of product into standard hours allowed for all work accomplished for the month.)

b. Prepare journal entries to record the incurrence of actual overhead, ap¬ plication of overhead to production, and closing of the overhead vari¬ ance accounts (assuming those variances are immaterial).

c. Evaluate the effectiveness of the managers in controlling costs.LO.1

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Picnic table Swing Bench 10 standard direct labor hours 3 standard direct labor hours 12 standard direct labor hours