Required 1
a. The variable overhead spending variance.
b. The variable overhead efficiency variance.
c. The fixed overhead spending (budget) variance.
d. The fixed overhead production volume variance.
e. The total amount of under- or overapplied manufacturing overhead (i.e., the total manufacturing overhead cost variance for the period).
Required 2
Prepare the following four journal entries:
(a) to record actual variable overhead costs,
(b) to record actual fixed overhead costs,
(c) to record standard overhead costs applied to production, and
(d) to record all four overhead cost variances.
The company uses a single account, Factory Overhead, to record all overhead costs. Assume that the actual variable manufacturing overhead consists of utilities payable of $169,000, indirect materials of $116,000 (all materials, direct and indirect, are recorded in a single account, Materials Inventory), and $66,000 depreciation on factory equipment (determined under the units-of-production method). Assume that the fixed manufacturing overhead consists of accrued (i.e., unpaid) salaries of $68,000 and factory depreciation of $240,000. All unpaid salaries should be recorded in a single account, Accrued Payroll.
Required 3
Prepare the appropriate journal entry to close all manufacturing overhead variances to the cost of goods sold (COGS) account. (Assume the cost variances you calculated above are for the year, not the month.)
