Direct Materials, Direct Labor, and Overhead Variances, Journal Entries Algers Company produces dry fertilizer. At the beginning of the year, Algers had the following standard cast sheet: Algers computes its overhead rates using practical volume, which is $4,000 units. The actual results for the year are as follows: a. Units produced: 53,000 b. Direct materials purchased: 273,000 pounds at $2.50 per pound c. Direct materials used: 270,200 pounds d. Direct labor: 40,100 hours at $17,95 per- hour e. Fixed overhead: $161,600 f. Variable overhead: $122,000 Required: 1. Compute price and usage variances for direct materials. MPV MUN : 2. Compute the direct labor rate and labor efficiency variances. Lbor Rate Variance s Labor Efficiency Vartance 9 3. Compute the fixed overhead spending and volume variances. Spending Variance Volume Variance 4. Compute the variable overhead spending and efficiency variances. Spending Variance Efficiency Variance 5. Prepare journal entries for the following: a. The purchase of direct materials b. The issuance of direct materials to production (Work in Process) c. The addition of direct labor to Work in Process d. The addition of overhead to Work in Process e. The incurrence of actual overhead costs If an amount box does not require an entry, leave it blank. If an amount box does not require an entrv. leave it blank. t. Prepare journal entries for the closing out of variances to Cost of Goods Sold. If an amount box does not require an entry, leave it blank. First, close direct materials and direct labor variances: Second, recognize the overhead variances: If an amount box does not require an entry, leave it blank. Third, close the overhead variances: Note: Close the variances with a debit balance first. For compound entries, if an amount box does not require an entry, leave it blank