Straightforward four-variance overhead analysis. The Lopez Company uses a standardcost system in its manufacturing plant for auto parts. Its standard cost of an auto part, based on a denominator level of 4,000 output units per year, included six machine-hours ofvariable manufacturing overhead at $9.60 per hour and six machine-hours of fixed manufacturing overhead at $18 per hour. Actual output achieved was 4,400 units. Variable manufacturing overhead incurred was $294,580. Fixed manufacturing overhead incurred was $447,590.

Actual incurred machine-hours were 28,600.

Required 1. Prepare an analysis of all variable manufacturing overhead and fixed manufacturing overhead variances, using the four-variance analysis.

2. Prepare journal entries using the four-variance analysis.

3. Describe how individual variable manufacturing overhead items are controlled from day to day. Also, describe how individual fixed manufacturing overhead items are controlled.