Tamra Company uses a standard cost system. Factory overhead is applied to its product using direct

labor hours. A condensed version of the company's flexible budget follows:

Additionally, $3$ gallons of material and $2$ hours of direct labor are required having standard costs of $$15$

per gallon and $$20$ per hour, respectively.

For the current year, the company planned to operate at the level of $6,250$ direct labor hours and to

produce $3,125$ units of product. Actual production and costs were:

Compute and label the four overhead variances.

Prepare the journal entries for overhead costs incurred, overhead costs applied, and to close the

variance accounts.