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

Laughlin, Inc., uses a standard costing system. The predetermined overhead rates are calculated using practical capacity. Practical

capacity for a year is defined as $1,000,000$ units requiring $200,000$ standard direct labor hours. Budgeted overhead for the year is

$$750,000,$ of which $$300,000$ is fixed overhead. During the year, $900,000$ units were produced using $190,000$ direct labor hours.

Actual annual overhead costs totaled $$800,000,$ of which $$294,700$ is fixed overhead.

Required:

Calculate the fixed overhead spending and volume variances.

Fixed Overhead Spending Variance

Calculate the variable overhead spending and efficiency variances.

Variable Overhead Spending Variance

$

Variable Overhead Efficiency Variance

$

Prepare the journal entries that reflect the following:

a$.$ Assignment of overhead to production

b$.$ Recognition of the incurrence of actual overhead

c$.$ Recognition of overhead variances

d$.$ Closing out overhead variances, assuming they are not material