The Martinez Company uses standard costing in its manufacturing plant for auto parts. The standard cost of a particular auto part, based on a denominator level of 3,800 output units per year, included 6 machine-hours of variable manufacturing overhead at $7 per hour and 6 machine-hours of fixed manufacturing overhead at $15 per hour. Actual output produced was 4,400 units. Variable manufacturing overhead incurred was $255,000. Fixed manufacturing overhead incurred was $375,000. Actual machine-hours were 26,500.

1.	Prepare an analysis of all variable manufacturing overhead and fixed manufacturing overhead variances, using the 4-variance analysis.
2.	Prepare journal entries using the 4-variance analysis.
3.	Describe how individual fixed manufacturing overhead items are controlled from day to day.
4.	Discuss possible causes of the fixed manufacturing overhead variances.

Actual Input Actual Costs Flexible Allocated Incurred Budgeted Rate Budget Overhead Variable OH Now complete the table below for the fixed manufacturing overhead Same Budgeted Lump Sunm Regardless of Output Level Actual Costs Flexible Allocated Incurred Budget Overhead Fixed OH Now complete the 4-variance analysis using the amounts you calculated above. (If no variance exists, leave the dollar value blank Label the variance as favorable (F), unfavorable (U) or never a variance (N).) 4-Variance Spending Efficiency Analysis Variance Variance Variance Variable OH Fixed OH Journal Entry Date Accounts Debit Credit Record the variable manufacturing overhead allocated Journal Entry Date Accounts Debit Credit Record the variable manufacturing overhead variances for the period Journal Entry Date Accounts Debit Credit