College Memories, Inc. publishes college yearbooks. A monthly flexible overhead budget for the firm follows. Problem 11-51 Comprehensive Problem on Overhead Accounting under Standard Costing: Journal Entries (Appendix A) (LO 11-2, 11-3, 11-5, 11-8) 2. Flexible budget variable overhead: $18,000 5. Fixed overhead applied to work-in-process $25,000 8. Cost of goods sold (debit) $14,130 COLLEGE MEMORIES, INC. Monthly Flexible Overhead Budget Direct-Labor Hours 1,750 1,500 2,000 $ 750 300 3,000 7.500 $ 875 350 3,500 8.750 $1,000 400 4,000 10.000 Budgeted Cost Variable costs Indirect material Glue Tape Miscellaneous supplies Indirect labor Utilities: Electricity Natural gas Total variable cost Fbed costs Supervisory labor Depreciation Property taxes and insurance Total foxed cost Total overhead cost 1,500 450 $13,500 1,750 525 2.000 600 $18.000 $15,750 12,500 3,400 4,100 $20.000 $33,500 12.500 3,400 4.100 $20.000 $35.750 12,500 3.400 4,100 $20,000 $38.000 25 hour per book and overhead is budgeted and applied on the basis of direct-labor hours. During February, College Memories, Inc., produced 8,000 yearbooks and actually used 2,100 direct-labor hours. The actual overhead costs for the month were as follows: Actual variable overhead Actual fixed overhead $19,530 37,600 Required: 1. Determine the formula-style flexible overhead budget for College Memories, Inc. 2. Prepare a display sin ar to Exhibit 11-6, which shows College Memories' variable-overhead vari- ances for February. Indicate whether each variance is favorable or unfavorable 3. Draw a graph simit to Exhibit 11-7, which shows College Memories' variable-overhead ances ion cry Internet each of the variances computed in requirement 2. 5. Prepare a display similar to Exhibit 11-8, which shows College Memories' fixed-overhead vari- ances for February 6. Draw a graph similar to Exhibit 11-9, which depicts the company's applied and budgeted fixed overhead for February. Show the firm's February volume variance on the graph. 7. Interpret each of the variances computed in requirement 5. 8. Prepare journal entries to record each of the following: Incurrence of February's actual overhead cost. Application of February's overhead cost to Work-in-Process Inventory. Close underapplied or overapplied overhead into Cost of Goods Sold. 9. Draw T-accounts for all of the accounts used in the journal entries of requirement 8. Then post the journal entries to the T-accounts