Four OH variances; journal entries Kemp Manufacturing set 210,000 direct labor hours as the annual capacity measure for computing its predetermined variable overhead rate. At that level, budgeted variable overhead costs are $945,000. Kemp will apply budgeted fixed overhead of $421,200 on the basis of 11,700 budgeted machine hours for the year. Both machine hours and fixed overhead costs are expected to be incurred evenly each month. During March, Kemp incurred 17,700 direct labor hours and 500 machine hours. Actual variable and fixed overhead were $78,975 and $34,200, respectively. The standard times allowed for March production were 17,940 direct labor hours and 870 machine hours. a. Using the four-variance approach, determine the overhead variances for March. Note: Do not use negative signs with your answers. VOH Spending Variance Actual VOH - Budgeted VOH - VOH Spending Variance $ 0-$ VOH Efficiency Variance 0 Budgeted VOH- Applied VOH - VOH Efficiency Variance $ 0 = FOH Spending Variance Actual FOH - Budgeted FOH - FOH Spending Variance 0 $ 0.5 FOH Volume Variance 0 Budgeted FOH-Applied FOH - FOH Volume Variance 0-$ 0 b. Prepare all journal entries related to overhead for Kemp Manufacturing for March. Note: Record any multiple debits or any multiple credits in alphabetical order by account name. Account Debit Credit 0 0 D 0 0 To record actual overhead cost for March = 0 D = D 0 0 To apply overhead to work in process for March = D D 0 0 0 To record variable overhead variances for March = 12 + 0 0 0 0 To record fixed overhead variances for March