Basic Variance Analysis, Revision of Standards, Joumal Entries Petrillo Company produces engine parts for large motors. The company uses a standard cost system for production costing and control. During the year, Petrillo had the following activity related to valve production: a. Production of valves totaled 20,600 units. b. A total of 135,600 pounds of direct materials was purchased at $5.36 per pound. c. There were 10,000 pounds of direct materials in beginning inventory (carried at $5.40 per pound). There was no ending inventory. d. The company used 36,500 direct labor hours at a total cost of $656,270. e. Actual fixed overhead totaled $111,000. f. Actual variable overhead totaled $168r000. Petrillo produces all of its valves in a single plant. Normal activity is 20,000 units per year. Standard overhead rates are computed based o Required: 1. Compute the direct materials price and usage variances. MPV s MUV \& 2. Compute the direct labor rate and efficiency variances. Labor Rate Variance Labor Efficiency Variance : 3. Compute overhead variances using a two-variance analysis. 4. Compute overhead variances using a four-variance analysis. C. Record direct labor Work in Process Direct Labor Efficiency Variance Direct Labor Rate Variance Wages Payable d. Close materials usage and labor variances to CGS Cost of Goods Sold Direct Labor Rate Variance Direct Materials Usage Variance Direct Labor Efficiency Variance e. Close price variance to CGS Direct Materials Price Variance Cost of Goods Sold f. Record actual variable overhead Variable Overhead Control Miscellaneous Accounts g. Record actual fixed overhead Fixed Overhead Control Various Accounts h. Apply variable overhead Work in Process Variable Overhead Control i. Apply fixed overhead Work in Process Fixed Overhead Control j. Record overhead variances k. Close spending and efficiency variances to CGS Cost of Goods Sold Variable Overhead Efficiency Variance Fixed Overhead Spending Variance Variable Overhead Spending Variance I. Close volume variance to CGS Fixed Overhead Volume Variance Cost of Goods Sold