Overhead Variances, Four$-$Variance Analysis, Journal Entries

Janson, Inc., uses a standard costing system. The predetermined overhead rates are calculated using practical capacity. Practical capacity for a year is defined as $100,000$ units requiring $20,000$ standard direct labor hours. Budgeted overhead for the year is $$76,000,$ of which $$30,000$ is fixed overhead. During the year, $96,000$ units were produced using $19,000$ direct labor hours. Actual annual overhead costs totaled $$80,000,$ of which $$29,600$ is fixed overhead.

Required:

Question Content Area

$1.$ Calculate the fixed overhead spending and volume variances.

Fixed Overhead Spending Variance $fill in the blank $30$e$29203$bfe$003$e$\_1$

$400$

Favorable

Fixed Overhead Volume Variance $fill in the blank $30$e$29203$bfe$003$e$\_3$

$1,200$

Unfavorable

$2.$ Calculate the variable overhead spending and efficiency variances.

Variable Overhead Spending Variance $fill in the blank $30$e$29203$bfe$003$e$\_5$

$6,700$

Unfavorable

Variable Overhead Efficiency Variance $fill in the blank $30$e$29203$bfe$003$e$\_7$

$460$

Favorable

Feedback Area

Feedback

Question Content Area

$3.$ Prepare the journal entries that reflect the following:

Assignment of overhead to production

Recognition of the incurrence of actual overhead

Recognition of overhead variances

Closing out overhead variances, assuming they are not material

Note: Close the variances with a debit balance first. For compound entries, if an amount box does not require an entry, leave it blank.

a$.$

Work in Process

$72,960$

Variable Overhead Control

$44,160$

Fixed Overhead Control

$28,800$

b$.$

Variable Overhead Control

$50,400$

Fixed Overhead Control

$29,600$

Miscellaneous Accounts

$80,000$

c$.$

Fixed Overhead Volume Variance

$1,200$

Variable Overhead Spending Variance

$6,700$

Variable Overhead Efficiency Variance

$460$

Fixed Overhead Spending Variance

$400$

Fixed Overhead Control

$800$

Variable Overhead Control

$6,240$

d$.$

Cost of Goods Sold

Fixed Overhead Spending Variance

Variable Overhead Efficiency Variance

Fixed Overhead Volume Variance

Variable Overhead Spending Variance