Simpson Manufacturing has the following standard cost sheet for one of its products:

The company uses a standard cost system and applies factory overhead cost based on direct labor hours and determines the factory

Overhead rate based on a practical capacity of $400$ units of the product.

Simpson has the following actual operating results for the year just completed:

Before closing the perlodic accounts, the $($standard cost$)$ entrles in selected accounts follow.

Required:

Determine for the period the following Items:

a$.$ Flexlble budget for varlable factory overhead cost based on output for the perlod.

b$.$ Total varlable overhead cost applied to production during the perlod.

c$.$ Total budgeted fixed factory overhead cost.

d$.$ Total fixed factory overhead cost applied to production during the period.

Compute the following factory overhead cost varlances using a four$-$varlance analysis:

a$.$ Total varlable overhead cost varlance.

b$.$ Varlable overhead spending varlance.

c$.$ Varlable overhead efficlency varlance.

d$.$ Total underapplied or overapplied varlable overhead.

e$.$ Flxed overhead spending varlance.

f$.$ Fixed overhead production volume varlance.

g$.$ Total fixed overhead cost varlance.

h$.$ Total underapplied or overapplied fixed overhead.

Compute the following factory overhead cost varlances using three$-$varlance analysis:

a$.$ Overhead spending varlance.

b$.$ Overhead efficlency varlance.

c$.$ Fixed overhead production volume varlance.

Compute the total overhead flexible$-$budget varlance and the fixed overhead production volume varlance using a two$-$varlance

analysis.

Using a single overhead account $($e$.$g$..$ Factory Overhead$),$ make proper Journal entrles for:

a$.$ Incurrence of factory overhead costs.

b$.$ Application of factory overhead costs to production.

c$.$ Identification of overhead varlances assuming that the firm uses the four$-$varlance analysis identfied in requirement $2.$

d$.$ Close all factory overhead cost Items and their varlances of the perlod If:

$(1)$ The firm closes all varlances to the Cost of Goods Sold account.

$(2)$ The firm prorates varlances to the inventory accounts and the Cost of Goods Sold account.

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