Standard Overhead Costs: Standard Company developed standard overhead costs based on a monthly capacity of 90,000 machine-hours as follows:

During April, 85,000 units were scheduled for production; however, only 80,000 units were actually produced. The following data relate to April:

1. Actual machine-hours totaled 82,500.

2. Actual overhead incurred totaled $1,378,000—$518,000 variable and $860,000 fixed.

3. There was no work in process inventory and no beginning finished goods in- ventory. All inventories are carried at standard cost.

Required: Prepare journal entries to record these transactions and set up overhead variances.

Transcribed Image Text:

Standard costs per unit: Variable portion: 1 hour at $6 Fixed portion: 1 hour at $10 $ 6 10 $16