Johnny Lee Incorporated produces a line of small gasoline-powered engines that can be used in a varlety of residentlal machines, rangling from dlfferent types of lawnmowers, to snowblowers, to garden tools (such as tlllers and weed-whackers). The basic product Iine consists of three dliferent models, each meant to fill the needs of a dlfferent market. Assume you are the cost accountant for this company and that you have been asked by the owner of the company to construct a flexible budget for factory overhead costs, which seem to be growing faster than revenues. Currently, the company uses machine hours (MHs) as the basis for assigning both varlable and fixed factory overhead costs to products. Within the relevant range of output, you determine that the following factory overhead costs per month should occur. engineering support, $16,700; Insurance on the manufacturing facllity, $6,700; property taxes on the manufacturing facility, $13,700; depreclation on manufacturing equipment, $15,500; and Indirect labor costs of supervisory salarles, $16,100, setup labor, $4,100, and materlals handling. $4,200. Varlable factory overhead costs are budgeted at $21.00 per machine hour, as follows: electricity, $7.00; indirect materlals for Materlal A of $200 and for Materlal B of $4.00; indirect labor-maintenance, $6.00; and productlon-related supplies, $200. Assume that in a glven month (December) the standard allowed machine hours for output produced was 7,200. Also, assume that the denominator actlvity level for setting the predetermined overhead application rate is 7,700 machine hours per month. Actual fixed overhead costs for the month of December were as follows: englneering support, $20,600 (salarles); factory Insurance, $10,600; property taxes, $13,700; equipment depreclation, $15,500; supervisory salarles, $16,100; setup labor, $7,300; materlalshandling labor, $7,500. The actual varlable overhead cost per machine hour worked in December was equal to the standard cost except for the following two items: electricity, $7.50 per machine hour; and manufacturing supplies, $2.10 per machine hour. All salary and wage amounts have not yet been paid. The company used 7,300 machine hours in December. The company uses a single overhead account, Factory Overhead, and performs a two-way analysis of the total factory overhead cost varlance each month. Required: 1. Calculate (a) the total factory overhead cost varlance, (b) the total flexible-budget varlance, and (c) the production volume varlance for the month. State whether each varlance was favorable (F) or unfavorable (U). 2. Provile the summary joumal entry to record (separately) each of the following: (a) actual varlable overhead costs, (b) actual fixed overhead costs, (c) standard varlable overhead cost applied to production, and (d) standard fixed overhead cost applied to production. Note: Accrued payroll costs are recorded In Salarles and Wages Payable, while transactlons regarding indirect materlals and manufacturing supplies are recorded in the Indirect Materlals Inventory account. 3. Provide a single journal entry to record the two factory overhead cost varlances for the month. 4. Assume that the varlances calculated above represent net overhead cost varlances for the year. Provide the required journal entry to close these two varlances to the Cost of Goods Sold (COGS) account