Lungren has budgeted construction overhead for August of $260,000 for variable costs and $435,000 for fixed costs. Actual costs for the month totaled $275,000 for variable and $445,000 for fixed. Allocated variable overhead totaled $285,000 and allocated fixed overhead totaled $440,000. The company tracks each item in an overhead control account before allocations are made to individual jobs. Spending variances for August were $10,000 unfavorable for variable and $20,000 unfavorable for fixed.

Required:

a. Make journal entries for the actual overhead costs incurred.

b. Make journal entries to allocate overhead to inventory.

c. Compute the variable overhead efficiency variance and the fixed overhead production volume variance.