Problem 3 (11 Marks) The Saskatchewan division of a Canadian farm machinery company uses a standard cost system for its machine-based production of grain drying equipment. Data regarding production for April are as follows: Variable manufacturing overhead costs incurred Variable manufacturing overhead costs allocation rate Fixed manufacturing overhead costs incurred Fixed manufacturing overhead budgeted Denominator level machine hours Standard machine hours allowed per unit of output Units produced Actual machine-hours used Ending work-in-process inventory $ 549,600 $750 per machine hour $86,500 $90,000 800 hours 40 hours 22 units 820 hours nil Required: 1. Prepare the necessary journal entries to account for the fixed manufacturing overhead incurred and allocated to production 2. Prepare the journal entry to close the fixed overhead variance accounts assuming that the fluctuation in denominator level is considered to be normal