Carlos Gonzalez Marine Manufacturing applies variable manufacturing overhead to production on the basis of \($6\) per direct labor hour. The labor efficiency standard is three hours per finished unit. Last month the company produced 15,000 units and used 45,650 direct labor hours. Actual variable overhead cost incurred totaled $277,700.

Required:

a. Determine the variable manufacturing overhead spending variance.

b. According to the appropriate standard, how many direct labor hours should it have taken to produce the 15,000 units?

c. Determine the direct labor efficiency variance in hours.

d. Determine the variable manufacturing overhead efficiency variance in dollars.

e. Appendix: Prepare the following journal entries:

1. Record the actual variable manufacturing overhead. (Use “various accounts” for the credit side of the entry.)

2. Record the variable manufacturing overhead applied to production.

3. Close the variable manufacturing overhead accounts and establish the variable overhead variance accounts.

4. Close the variance accounts to cost of goods sold.