Phoenix Company manufactures only one product and uses a standard cost system. The company uses a plantwide predetermined overhead rate that relies on direct labor hours as the

allocation base. The predetermined overhead rate is based on a cost formula that estimated $2,880,000 manufacturing overhead costs. The predetermined overhead rate is based on a cost formula that estimated $2,880,000 of fixed manufacturing overhead for an estimated allocation base of 288,000 direct labor hours. Wallis does not maintain any beginning or ending work in process inventory.

The company's beginning balance sheet is as follows:

Wallis Co
Balance Sheet
1/1/xx
Assets
Cash	$700
Raw materials inventory	150
Finished goods inventory	270
Property,plant and equipment, net	8,500
Total ASSETS	$9,620
Liabilities & Equity: Retained Earnings	$9,620
Total Liabilities and equity	$9,620

The company's standard cost card for its only product is as follows:

INPUTS	STANDARD QUANTITY/HRS	STANDRAD PRICE/RATE	STANDARD COST
DIRECT MATL	2 POUNDS	$30 PER POUND	$60
DIRCT LABOR	3 HOURS	$15 PER HR	$45
FIXED MFG OH	3 HOURS	$10 PER HR	$30
TOTAL STANDARD COST PER UNIT			$135

During the year Wallis completed the ff transactions:

d) Applied fixed OH to work in process inventory using the predetermined OH rate multiplied by the number of direct labor hours allowed to manufacture 95,000 units. Actual fixed OH costs for the year were $2,740,000. Of this total, $1,340,000 related to items such as insurance, utilities and salaried indirect laborers that were all paid in cash and $1,400,000 related to depreciation of equipment. Transferred 95,000 units from work in process to finished goods.

REQUIRED:

Compute all variable and fixed OH variances, label variances as favorable or unfavorable and prepare journal entries.