The Lopez Co uses a standard costing system in its auto part plant Its standard cost of an auto part, based on a denominator level of 4,000 output units per year, included 6 machine hours of variable manufacturing overhead at $8 per hour and 6 machine hours of fixed MO at $ 55 per hour Actual output produced was 4,400 units Variable MO incurred was $245,000 Fixed MO incurred was $373,000 Actual machine hours were 28,400 Required 1 Compute Variable Overhead Spending Variance and label it as favorable or unfavorable 2 Compute Variable Overhead Efficiency Variance and label it as favorable or unfavorable 3 Is Variable Overhead over or under allocated and by how much 4 Prepare the journal entry to record the actual variable overhead (assume all costs went to Accounts Payable) 5 Prepare the journal entry to record the allocated variable overhead 6 Prepare the journal entry to record the variable overhead variances and to close the Variable Overhead Control account

Question

The Lopez Co  uses a standard costing system in its auto part plant  Its standard cost of an auto part, based on a denominator level of 4,000 output units per year, included 6 machine hours of variable manufacturing overhead at $8 per hour and 6 machine hours of fixed MO at $ 55 per hour  Actual output produced was 4,400 units  Variable MO incurred was $245,000  Fixed MO incurred was $373,000  Actual machine hours were 28,400  Required  1  Compute Variable Overhead Spending Variance and label it as favorable or unfavorable  2  Compute Variable Overhead Efficiency Variance and label it as favorable or unfavorable  3  Is Variable Overhead over or under allocated and by how much  4  Prepare the journal entry to record the actual variable overhead (assume all costs went to Accounts Payable)  5  Prepare the journal entry to record the allocated variable overhead  6  Prepare the journal entry to record the variable overhead variances and to close the Variable Overhead Control account

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The Lopez Co. uses a standard costing system in its auto part plant. Its standard cost of an auto part, based on a denominator level

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