Problem 10A-8 (Algo) Applying Overhead; Overhead Variances [LO10-3, LO10-4]

Lane Company manufactures a single product that requires a great deal of hand labor. Overhead cost is applied on the basis of standard direct labor-hours. The budgeted variable manufacturing overhead is $3.00 per direct labor-hour and the budgeted fixed manufacturing overhead is $735,000 per year.

The standard quantity of materials is 4 pounds per unit and the standard cost is $5.50 per pound. The standard direct labor-hours per unit is 1.5 hours and the standard labor rate is $12.50 per hour.

The company planned to operate at a denominator activity level of 105,000 direct labor-hours and to produce 70,000 units of product during the most recent year. Actual activity and costs for the year were as follows:

Actual number of units produced	84,000
Actual direct labor-hours worked	136,500
Actual variable manufacturing overhead cost incurred	$ 259,350
Actual fixed manufacturing overhead cost incurred	$ 750,750

Complete this question by entering your answers in the tabs below.Complete the following Manufacturing Overhead T-account for the year.

Manufacturing Overhead
Debit		Credit
Actual costs	1,010,100		Applied costs. ?????
	1,010,100

Determine the reason for any underapplied or overapplied overhead for the year by computing the variable overhead rate and efficiency variances and the fixed overhead budget and volume variances. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.)

Variable overhead rate variance????????
Variable overhead efficiency variance?????
Fixed overhead budget variance???????
Fixed overhead volume variance??????