Business Specialty, Inc., manufactures two staplers: small and regular. The standard quantities of direct labor and direct materials per unit for the year are as follows:

	Small	Regular
Direct materials (oz.)	6.0	10.00
Direct labor (hrs.)	0.1	0.15

The standard price paid per pound of direct materials is $1.60. The standard rate for labor is $8.00. Overhead is applied on the basis of direct labor hours. A plantwide rate is used. Budgeted overhead for the year is as follows:

Budgeted fixed overhead	$360,000
Budgeted variable overhead	480,000

The company expects to work 12,000 direct labor hours during the year; standard overhead rates are computed using this activity level. For every small stapler produced, the company produces two regular staplers.

Actual operating data for the year are as follows:

1. Units produced: small staplers, 35,000; regular staplers, 70,000.
2. Direct materials purchased and used: 56,000 pounds at $1.5513,000 for the small stapler and 43,000 for the regular stapler. There were no beginning or ending direct materials inventories.
3. Direct labor: 14,800 hours3,600 hours for the small stapler and 11,200 hours for the regular stapler. Total cost of direct labor: $114,700.
4. Variable overhead: $607,500.
5. Fixed overhead: $350,000.

4. Compute the variances for fixed and variable overhead.

Fixed Overhead Spending Variance	$fill in the blank abdc39faaff6fcd_1	FavorableUnfavorable
Fixed Overhead Volume Variance	$fill in the blank abdc39faaff6fcd_3	FavorableUnfavorable
Variable Overhead Spending Variance	$fill in the blank abdc39faaff6fcd_5	FavorableUnfavorable
Variable Overhead Efficiency Variance	$fill in the blank abdc39faaff6fcd_7	FavorableUnfavorable

Prepare journal entries to record overhead activity. All variances are closed to Cost of Goods Sold. For compound entries, if an amount box does not require an entry, leave it blank.

1.	Fixed Overhead Volume VarianceMiscellaneous AccountsVariable Overhead ControlVariable Overhead Efficiency VarianceVariable Overhead Spending VarianceWork in Process	- Select -
	Fixed Overhead Volume VarianceMiscellaneous AccountsVariable Overhead ControlVariable Overhead Efficiency VarianceVariable Overhead Spending VarianceWork in Process		- Select -
	Apply variable overhead
2.	Fixed Overhead Volume VarianceMiscellaneous AccountsVariable Overhead ControlVariable Overhead Efficiency VarianceVariable Overhead Spending VarianceWork in Process	- Select -
	Cost of Goods SoldFixed Overhead ControlFixed Overhead Spending VarianceFixed Overhead Volume VarianceMiscellaneous AccountsVariable Overhead Control		- Select -
	Apply fixed overhead
3.	Cost of Goods SoldFixed Overhead Spending VarianceFixed Overhead Volume VarianceMiscellaneous AccountsVariable Overhead ControlWork in Process	- Select -
	Cost of Goods SoldFixed Overhead ControlFixed Overhead Spending VarianceFixed Overhead Volume VarianceMiscellaneous AccountsVariable Overhead Control		- Select -
	Actual variable overhead
4.	Cost of Goods SoldFixed Overhead ControlFixed Overhead Spending VarianceFixed Overhead Volume VarianceMiscellaneous AccountsVariable Overhead Control	- Select -
	Fixed Overhead Volume VarianceMiscellaneous AccountsVariable Overhead ControlVariable Overhead Efficiency VarianceVariable Overhead Spending VarianceWork in Process		- Select -
	Actual fixed overhead
5.	Cost of Goods SoldFixed Overhead ControlMiscellaneous AccountsVariable Overhead ControlWages PayableWork in Process	- Select -	- Select -
	Cost of Goods SoldFixed Overhead Volume VarianceVariable Overhead ControlVariable Overhead Spending VarianceWages PayableWork in Process	- Select -	- Select -
	Cost of Goods SoldFixed Overhead Volume VarianceVariable Overhead ControlVariable Overhead Efficiency VarianceWages PayableWork in Process	- Select -	- Select -
	Fixed Overhead ControlFixed Overhead Spending VarianceMiscellaneous AccountsVariable Overhead Efficiency VarianceVariable Overhead Spending VarianceWork in Process	- Select -	- Select -
	Cost of Goods SoldFixed Overhead ControlFixed Overhead Volume VarianceMiscellaneous AccountsVariable Overhead Efficiency VarianceVariable Overhead Spending Variance	- Select -	- Select -
	Fixed Overhead ControlMiscellaneous AccountsVariable Overhead ControlVariable Overhead Efficiency VarianceVariable Overhead Spending VarianceWork in Process	- Select -	- Select -
	Record fixed and variable overhead variances
6.	CashCost of Goods SoldFixed Overhead ControlMiscellaneous AccountsVariable Overhead ControlVariable Overhead Efficiency Variance	- Select -	- Select -
	Fixed Overhead Spending VarianceFixed Overhead Volume VarianceMiscellaneous AccountsVariable Overhead ControlVariable Overhead Spending VarianceWork in Process	- Select -	- Select -
	Fixed Overhead Spending VarianceFixed Overhead Volume VarianceMiscellaneous AccountsVariable Overhead ControlVariable Overhead Efficiency VarianceWork in Process	- Select -	- Select -
	Close variable overhead variances
7.	CashFixed Overhead ControlFixed Overhead Spending VarianceMiscellaneous AccountsVariable Overhead ControlVariable Overhead Efficiency Variance	- Select -	- Select -
	Fixed Overhead ControlFixed Overhead Volume VarianceMiscellaneous AccountsVariable Overhead ControlVariable Overhead Efficiency VarianceVariable Overhead Spending Variance	- Select -	- Select -
	Cost of Goods SoldFixed Overhead ControlFixed Overhead Spending VarianceFixed Overhead Volume VarianceMiscellaneous AccountsVariable Overhead Control	- Select -	- Select -
	Close fixed overhead variances

5. Assume that you know only the total direct materials used for both products and the total direct labor hours used for both products. Compute the total direct materials and direct labor usage variances.

MUV	$fill in the blank 00d2a4010ffcfc5_1	FavorableUnfavorable
LEV	$fill in the blank 00d2a4010ffcfc5_3	FavorableUnfavorable