The Bartlesville plant of Iverson Company produces an industrial chemical. At the beginning of the year, the Bartlesville plant had the following standard cost sheet:

Direct materials (10 lbs. @ $1.60) $16.00

Direct labor (0.75 hrs. @ $18.00) 13.50

Fixed overhead (0.75 hrs. @ $4.00) 3.00

Variable overhead (0.75 hrs.@ $3.00) 2.25

Standard cost per unit $34.75

The Bartlesville plant computes its overhead rates using practical volume, which is 72,000 units. The actual results for the year are:

Units produced: 70,000

Materials purchased: 744,000 pounds at $1.50

Materials used: 736,000 pounds

Direct labor: 56,000 hours at $17.90

Fixed overhead: $214,000

Variable overhead: $175,400

Required:

1. Compute the variable overhead spending, Fixed overhead , efficiency, and production volume variances (four way analysis of variance).

2. Prepare journal entries for factory overhead variances:

a. One way analysis of variance.

b. Two way analysis of variance.