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 cost sheet: $13.00 13.50 Direct materials (5 lbs. @ $2.60) Direct labor (0.75 hr. @ $18.00) Fixed overhead (0.75 hr. @ $4.00) Variable overhead (0.75 hr. @ $3.00) 3.00 2.25 Standard cost per unit $31.75 Algers computes its overhead rates using practical volume, which is 54,000 units. The actual results for the year are as follows: a. Units produced: 53,000 b. Direct materials purchased: 275,000 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: $122,100 e. Variable Overhead Control Fixed Overhead Control III Various Accounts 283,700 Second, recognize the overhead variances: If an amount box does not require an entry, leave it blank. Fixed Overhead Volume Variance Variable Overhead Spending Variance Variable Overhead Efficiency Variance 1,050 Fixed Overhead Spending Variance 400 Fixed Overhead Control Variable Overhead Control Feedback Check My Work Partially correct Third, close the overhead variances: Note: Close the variances with a debit balance first. For compound entries, if an am Cost of Goods Sold Fixed Overhead Volume Variance Variable Overhead Spending Variance Variable Overhead Efficiency Variance Fixed Overhead Spending Variance Cost of Goods Sold