Q2

Overhead Variances, Four-Variance Analysis, Journal Entries requiring 20,000 standard direct labor hours. Budgeted overhead for the year is $76,000, of which $30,000 is fixed overhead. During the year, 96,000 units were produced 19,000 direct labor hours. Actual annual overhead costs totaled $80,000, of which $29,600 is fixed overhead. Required: 1. Calculate the fixed overhead spending and volume variances. 2. Calculate the variable overhead spending and efficiency variances. 3. Prepare the journal entries that reflect the following: a. Assignment of overhead to production b. Recognition of the incurrence of actual overhead c. Recognition of overhead variances d. Closing out overhead variances, assuming they are not material