Assume the following:

Actual Variable Overhead	$17,000
Allocated Variable Overhead	$18,000
Budgeted Variable Overhead	$17,500
VOH Spending Variance Variance	$1500 F
VOH Efficiency Variance	$500 U

Prepare the following journal entries:

a. Record Actual Overhead

b. Record Allocated Overhead

c. Record the variances and close the overhead accounts

d. Close the variance accounts

Answer the following questions:

e. Is overhead under or over-applied?

f. Did you increase or decrease COGS in entry (d)? Why does this make sense?