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Plimpton Company produces countertop ovens. Plimpton uses a standard costing system. The standard costing system relies on direct labor hours to assign overhead costs to

Plimpton Company produces countertop ovens. Plimpton uses a standard costing system. The standard costing system relies on direct labor hours to assign overhead costs to production. The direct labor standard indicates that two direct labor hours should be used for every oven produced. The normal production volume is 100,000 units. The budgeted overhead for the coming year is as follows:

Fixed overhead $760,000

Variable overhead 446,000^*

^*At normal volume.

Plimpton applies overhead on the basis of direct labor hours.

During the year, Plimpton produced 97,000 units, worked 196,000 direct labor hours, and incurred actual fixed overhead costs of $770,300 and actual variable overhead costs of $437,580.

Required:

1. Calculate the standard fixed overhead rate and the standard variable overhead rate. Round your answers to the nearest cent. Use rounded answers in the subsequent computations.

Standard fixed overhead rate $fill in the blank f21610ffb01bf83_1 per direct labor hour

Standard variable overhead rate $fill in the blank f21610ffb01bf83_2 per direct labor hour

2. Compute the applied fixed overhead and the applied variable overhead. Use the application rates from part (1) in your calculations.

Fixed $fill in the blank f21610ffb01bf83_3

Variable $fill in the blank f21610ffb01bf83_4

What is the total fixed overhead variance? $fill in the blank f21610ffb01bf83_5

FavorableUnfavorableFavorable

What is the total variable overhead variance? $fill in the blank f21610ffb01bf83_7

FavorableUnfavorableFavorable

3. Break down the total fixed overhead variance into a spending variance and a volume variance.

Spending Variance $fill in the blank f21610ffb01bf83_9
FavorableUnfavorable

Volume Variance $fill in the blank f21610ffb01bf83_11
FavorableUnfavorable

4. Compute the variable overhead spending and efficiency variances.

Spending Variance $fill in the blank f21610ffb01bf83_13
FavorableUnfavorable

Efficiency Variance $fill in the blank f21610ffb01bf83_15
FavorableUnfavorable

5. Now assume that Plimpton's cost accounting system reveals only the total actual overhead. In this case, a three-variance analysis can be performed. Using the relationships between a three- and four-variance analysis, indicate the values for the three overhead variances.

Volume variance $fill in the blank f21610ffb01bf83_17
FavorableUnfavorable

Variable overhead efficiency variance $fill in the blank f21610ffb01bf83_19
FavorableUnfavorable

Spending variance $fill in the blank f21610ffb01bf83_21
FavorableUnfavorable

6. Prepare journal entries (1) to apply overhead to production, (2) to record the actual overhead costs incurred, (3) to record the variable and fixed overhead variances, and (4) to close the variance accounts at the end of the year. Assume variances are closed to Cost of Goods Sold. If an amount box does not require an entry, leave it blank.

1.
Cost of Goods SoldFixed Overhead ControlFixed Overhead Spending VarianceFixed Overhead Volume VarianceVarious AccountsVariable Overhead ControlVariable Overhead Efficiency VarianceVariable Overhead Spending VarianceWork in ProcessWork in Process
Work in Process Work in Process

Cost of Goods SoldFixed Overhead Spending VarianceFixed Overhead Volume VarianceVarious AccountsVariable Overhead ControlVariable Overhead Efficiency VarianceVariable Overhead Spending VarianceWork in ProcessVariable Overhead Control
Variable Overhead Control Variable Overhead Control

Cost of Goods SoldFixed Overhead ControlVarious AccountsVariable Overhead Spending VarianceWork in ProcessFixed Overhead Control
Fixed Overhead Control Fixed Overhead Control

2.
Cost of Goods SoldVarious AccountsVariable Overhead ControlVariable Overhead Spending VarianceWork in ProcessVariable Overhead Control
Variable Overhead Control Variable Overhead Control

Cost of Goods SoldFixed Overhead ControlFixed Overhead Spending VarianceFixed Overhead Volume VarianceVarious AccountsVariable Overhead Efficiency VarianceVariable Overhead Spending VarianceWork in ProcessFixed Overhead Control
Fixed Overhead Control Fixed Overhead Control

Cost of Goods SoldFixed Overhead ControlFixed Overhead Spending VarianceFixed Overhead Volume VarianceVarious AccountsVariable Overhead ControlVariable Overhead Efficiency VarianceVariable Overhead Spending VarianceWork in ProcessVarious Accounts
Various Accounts Various Accounts

3.
CashFixed Overhead ControlFixed Overhead Spending VarianceVariable Overhead ControlWork in ProcessFixed Overhead Spending Variance
Fixed Overhead Spending Variance Fixed Overhead Spending Variance

CashCost of Goods SoldFixed Overhead Volume VarianceVariable Overhead ControlWork in ProcessFixed Overhead Volume Variance
Fixed Overhead Volume Variance Fixed Overhead Volume Variance

Cost of Goods SoldFixed Overhead ControlVariable Overhead ControlVariable Overhead Spending VarianceWork in ProcessVariable Overhead Spending Variance
Variable Overhead Spending Variance Variable Overhead Spending Variance

Cost of Goods SoldFixed Overhead ControlVariable Overhead ControlVariable Overhead Efficiency VarianceWork in ProcessVariable Overhead Efficiency Variance
Variable Overhead Efficiency Variance Variable Overhead Efficiency Variance

Cost of Goods SoldFixed Overhead ControlFixed Overhead Volume VarianceVariable Overhead Efficiency VarianceVariable Overhead Spending VarianceFixed Overhead Control
Fixed Overhead Control Fixed Overhead Control

Cost of Goods SoldFixed Overhead Volume VarianceVariable Overhead ControlVariable Overhead Efficiency VarianceVariable Overhead Spending VarianceWork in ProcessVariable Overhead Control
Variable Overhead Control Variable Overhead Control

4.
Cost of Goods SoldFixed Overhead ControlFixed Overhead Spending VarianceFixed Overhead Volume VarianceVarious AccountsVariable Overhead ControlVariable Overhead Efficiency VarianceVariable Overhead Spending VarianceWork in ProcessCost of Goods Sold
Cost of Goods Sold Cost of Goods Sold

Cost of Goods SoldFixed Overhead ControlFixed Overhead Spending VarianceVariable Overhead ControlWork in ProcessFixed Overhead Spending Variance
Fixed Overhead Spending Variance Fixed Overhead Spending Variance

Cost of Goods SoldFixed Overhead ControlFixed Overhead Volume VarianceVariable Overhead ControlWork in ProcessFixed Overhead Volume Variance
Fixed Overhead Volume Variance Fixed Overhead Volume Variance

Cost of Goods SoldFixed Overhead ControlVariable Overhead ControlVariable Overhead Spending VarianceWork in ProcessVariable Overhead Spending Variance
Variable Overhead Spending Variance Variable Overhead Spending Variance

Cost of Goods SoldFixed Overhead ControlVariable Overhead ControlVariable Overhead Efficiency VarianceWork in ProcessVariable Overhead Efficiency Variance
Variable Overhead Efficiency Variance Variable Overhead Efficiency Variance

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Fixed overhead	$760,000
Variable overhead	446,000^*
^*At normal volume.

Standard fixed overhead rate	$fill in the blank f21610ffb01bf83_1	per direct labor hour
Standard variable overhead rate	$fill in the blank f21610ffb01bf83_2	per direct labor hour

Fixed	$fill in the blank f21610ffb01bf83_3
Variable	$fill in the blank f21610ffb01bf83_4

Spending Variance	$fill in the blank f21610ffb01bf83_9	FavorableUnfavorable
Volume Variance	$fill in the blank f21610ffb01bf83_11	FavorableUnfavorable

Spending Variance	$fill in the blank f21610ffb01bf83_13	FavorableUnfavorable
Efficiency Variance	$fill in the blank f21610ffb01bf83_15	FavorableUnfavorable

Volume variance	$fill in the blank f21610ffb01bf83_17	FavorableUnfavorable
Variable overhead efficiency variance	$fill in the blank f21610ffb01bf83_19	FavorableUnfavorable
Spending variance	$fill in the blank f21610ffb01bf83_21	FavorableUnfavorable

1.	Cost of Goods SoldFixed Overhead ControlFixed Overhead Spending VarianceFixed Overhead Volume VarianceVarious AccountsVariable Overhead ControlVariable Overhead Efficiency VarianceVariable Overhead Spending VarianceWork in ProcessWork in Process	Work in Process	Work in Process
	Cost of Goods SoldFixed Overhead Spending VarianceFixed Overhead Volume VarianceVarious AccountsVariable Overhead ControlVariable Overhead Efficiency VarianceVariable Overhead Spending VarianceWork in ProcessVariable Overhead Control	Variable Overhead Control	Variable Overhead Control
	Cost of Goods SoldFixed Overhead ControlVarious AccountsVariable Overhead Spending VarianceWork in ProcessFixed Overhead Control	Fixed Overhead Control	Fixed Overhead Control
2.	Cost of Goods SoldVarious AccountsVariable Overhead ControlVariable Overhead Spending VarianceWork in ProcessVariable Overhead Control	Variable Overhead Control	Variable Overhead Control
	Cost of Goods SoldFixed Overhead ControlFixed Overhead Spending VarianceFixed Overhead Volume VarianceVarious AccountsVariable Overhead Efficiency VarianceVariable Overhead Spending VarianceWork in ProcessFixed Overhead Control	Fixed Overhead Control	Fixed Overhead Control
	Cost of Goods SoldFixed Overhead ControlFixed Overhead Spending VarianceFixed Overhead Volume VarianceVarious AccountsVariable Overhead ControlVariable Overhead Efficiency VarianceVariable Overhead Spending VarianceWork in ProcessVarious Accounts	Various Accounts	Various Accounts
3.	CashFixed Overhead ControlFixed Overhead Spending VarianceVariable Overhead ControlWork in ProcessFixed Overhead Spending Variance	Fixed Overhead Spending Variance	Fixed Overhead Spending Variance
	CashCost of Goods SoldFixed Overhead Volume VarianceVariable Overhead ControlWork in ProcessFixed Overhead Volume Variance	Fixed Overhead Volume Variance	Fixed Overhead Volume Variance
	Cost of Goods SoldFixed Overhead ControlVariable Overhead ControlVariable Overhead Spending VarianceWork in ProcessVariable Overhead Spending Variance	Variable Overhead Spending Variance	Variable Overhead Spending Variance
	Cost of Goods SoldFixed Overhead ControlVariable Overhead ControlVariable Overhead Efficiency VarianceWork in ProcessVariable Overhead Efficiency Variance	Variable Overhead Efficiency Variance	Variable Overhead Efficiency Variance
	Cost of Goods SoldFixed Overhead ControlFixed Overhead Volume VarianceVariable Overhead Efficiency VarianceVariable Overhead Spending VarianceFixed Overhead Control	Fixed Overhead Control	Fixed Overhead Control
	Cost of Goods SoldFixed Overhead Volume VarianceVariable Overhead ControlVariable Overhead Efficiency VarianceVariable Overhead Spending VarianceWork in ProcessVariable Overhead Control	Variable Overhead Control	Variable Overhead Control
4.	Cost of Goods SoldFixed Overhead ControlFixed Overhead Spending VarianceFixed Overhead Volume VarianceVarious AccountsVariable Overhead ControlVariable Overhead Efficiency VarianceVariable Overhead Spending VarianceWork in ProcessCost of Goods Sold	Cost of Goods Sold	Cost of Goods Sold
	Cost of Goods SoldFixed Overhead ControlFixed Overhead Spending VarianceVariable Overhead ControlWork in ProcessFixed Overhead Spending Variance	Fixed Overhead Spending Variance	Fixed Overhead Spending Variance
	Cost of Goods SoldFixed Overhead ControlFixed Overhead Volume VarianceVariable Overhead ControlWork in ProcessFixed Overhead Volume Variance	Fixed Overhead Volume Variance	Fixed Overhead Volume Variance
	Cost of Goods SoldFixed Overhead ControlVariable Overhead ControlVariable Overhead Spending VarianceWork in ProcessVariable Overhead Spending Variance	Variable Overhead Spending Variance	Variable Overhead Spending Variance
	Cost of Goods SoldFixed Overhead ControlVariable Overhead ControlVariable Overhead Efficiency VarianceWork in ProcessVariable Overhead Efficiency Variance	Variable Overhead Efficiency Variance	Variable Overhead Efficiency Variance