Gina in the King's Road Inc., makes naugahyde couches. The company uses two main materials to make the furniture, wood and leather. The company's standard costs for materials and labor are as follows (wood in boards and leather in pounds, variable/fixed overhead based on machine hours). Overhead costs are allocated to production based on machine hours. Standard Quantity Standard Price Standard Cost Or Hours or Rate Wood 19 boards $5.90 per board $ 112.10 Leather 28 pounds $ 8.40 per pound 235.20 Direct Labor 5.5 DL hours $ 19.00 per DL hour 104.50 Variable Manufacturing Overhead 2.3 M hours $ 8.50 per M hour 19.55 Fixed Manufacturing Overhead 2.3 M hours $ 18.00 per M hour 41.40 (Note: Denominator level of 9200 M hours, budgeted production 4000 units, and budgeted fixed overhead of $ 165,600.) Total standard cost per unit $ 512.75 The months results are as follows: Production and sales 4500 units. Actual fixed overhead costs incurred were $ 162,000. Purchases of wood this month were 88,000 boards for $ 5.80 each, the wood beginning inventory consisted of 5,000 boards at a total cost of $ 29,500, the month's ending inventory was 3,500 boards. Purchases of leather this month were 122,600 pounds for $ 8.95 each, the leather beginning inventory was 2,000 pounds at a total cost of $ 16,800, the month's ending inventory was 1,000 pounds. Finished goods and work in process inventories are insignificant and can be ignored. Assembly workers worked 24,550 direct labor hours at a cost of $ 21.40 a DL hour. 10,000 machine hours were used at an average variable overhead cost of $ 9.20 per M hour. It is the company's policy to close all overhead variances to cost of goods sold on a monthly basis. Compute the company's Material variances for price and efficiency separately each for wood and for leather, the labor price and efficiency variances, and the variable and fixed overhead spending and efficiency/production volumne variances. Was fixed manufacturing overhead over or under allocated? Draft journal entries for the variances above to record the variances (you need only use the journal entry examples from chapters 7 and 8, you need not record sales of products)