Standard Overhead Costs: Philadelphia Company uses a standard cost accounting system. The following over- head costs and production data are available for August:

Required: Compute overhead variances, then prepare journal entries for these transactions.

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Standard fixed overhead rate per direct labor-hour $ 1.00 Standard variable overhead rate per direct labor-hour Budgeted monthly direct labor-hours 4.00 40,000 Actual direct labor-hours worked 39,500 Standard direct labor-hours allowed for actual production Overall overhead variance-favorable 39,000 $ 2,000 Actual variable overhead 159,500