Problem 11-54 Overhead Application, Overhead Variances Moleno Company produces a single product and uses a standard cost system. The 120,000 units; each unit requires five direct labor hours at standard. Overhead is applied on the basis of direct labor Objective 2, 3 normal production volume is hours. The budgeted overhead for the coming year is as follows: FOH VOH $2,160,000* 1440,000 At normal volume During the year, Moleno produced 118,600 units, worked 592,300 direct labor hours, and incurred actual fixed overhead costs of $2,150,400 and actual variable overhead costs of $1,422,800. Required: 1. Cal 2. Compute the applied fixed overhead and the applied variable overhead. What is the total fixed overhead 3. Conceptual Connection: Break down the total fixed overhead variance into a spending variance and a volume overhead spending and efficiency variances. Discuss the culatec die siandard ixed overnead rate and the standard variable overhead rate. variance? Total variable overhead variance? variance. Discuss the significance of each. significance of each 4. Conceptual Connection: Compute the variable 5. Journal entries for overhead variances were not discussed in this chapter. Typically, the overhead variance entries happen at the end of the year. Assume that applied fixed (variable) overhead is accumulated on the (variable) overhead control account. Actual fixed (variable) overhead costs are accumu lated on the debit side of the respective control accounts. At the end of the year, the balance in each control account is the tota! fixed (variable) variance. Create accounts for each of the four overhead variances and close out the total variances to each of these four variance accounts. These four variance accounts are then usually credit side of the fixed closed to Cost of Goods Sold