Teri's Furniture uses variance analysis to evaluate manufacturing overhead in its' table factory. The information for the May overhead expenditures is as follows:

Budgeted output units 14,000 tables

Budgeted fixed manufacturing overhead $22,400

Budgeted variable manufacturing overhead $3.00 per direct labour hour

Budgeted direct manufacturing labour hours 0.2 hour per table

Fixed manufacturing costs incurred $24,000

Direct manufacturing labour hours used 4,000 hours

Variable manufacturing costs incurred $11,000

Actual units manufactured 15,000 tables

Required:

a. Calculate the variable manufacturing overhead rate and efficiency variances; and, the fixed manufacturing overhead rate and production-volume variances.

b. Prepare all necessary journal entries to record the actual costs, allocated costs, and variances. Keep variable and fixed entries separate.