Kemp Manufacturing set $126,000$ direct labor hours as the annual capacity measure for computing its predetermined variable overhead rate. At that level, budgeted variable overhead costs are $$567,000.$ Kemp will apply budgeted fixed overhead of $$252,720$ on the basis of $7,020$ 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 $10,620$ direct labor hours and $540$ machine hours. Actual variable and fixed overhead were $$47,385$ and $$20,520,$ respectively. The standard times allowed for March production were $10,764$ direct labor hours and $522$ 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

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VOH Efficiency Variance

Budgeted VOH $-$ Applied VOH $=$ VOH Efficiency Variance

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FOH Spending Variance

Actual FOH $-$ Budgeted FOH $=$ FOH Spending Variance

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FOH Volume Variance

Budgeted FOH $-$ Applied FOH $=$ FOH Volume Variance

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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

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To record actual overhead cost for March

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To apply overhead to work in process for March

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To record variable overhead variances for March

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To record fixed overhead variances for March