Overhead Application, Overhead Variances, Journal Entries Plimpton Company produces countertop ovens. Plimpton uses a standard costing system. The standard costing system relies on direct labor hours to assign overhead costs to production. The direct labor standard indicates that two direct labor hours should be used for every oven produced. The normal production volume is 100,000 units. The budgeted overhead for the coming year is as follows: Fixed overhead Variable overhead At normal volume. $770,000 446,000* Plimpton applies overhead on the basis of direct labor hours. During the year, Plimpton produced 97,000 units, worked 196,000 direct labor hours, and incurred actual fixed overhead costs of $780,100 and actual variable overhead costs of $437,540. Required: 1. Calculate the standard fixed overhead rate and the standard variable overhead rate. Round your answers to the nearest cent. Use rounded answers in the subsequent computations. Standard fixed overhead rate $ 3.85 per direct labor hour Standard variable overhead rate $ 2.23 per direct labor hour 2. Compute the applied fixed overhead and the applied variable overhead. Use the application rates from part (1) in your calculations. Fixed $746,900 Variable $432,620 What is the total fixed overhead variance? $ 33,200 Unfavorable 6. Prepare journal entries (1) to apply overhead to production, (2) to record the actual overhead costs incurred, (3) to record the variable and fixed overhead variances, and (4) to close the variance accounts at the end of the year. Assume variances are closed to Cost of Goods Sold. If an amount box does not require an entry, leave it blank or enter "O". 1. Work in Process Variable Overhead Control Fixed Overhead Control 2. Variable Overhead Control Fixed Overhead Control Various Accounts 3 Fixed Overhead Spending Variance Fixed Overhead Volume Variance Variable Overhead Spending Variance II) IIbibl.) III.) I1 III 11 III.) Variable Overhead Efficiency Variance Fixed Overhead Control Variable Overhead Control 4. Cost of Goods Sold Fixed Overhead Spending Variance Fixed Overhead Volume Variance Variable Overhead Spending Variance Variable Overhead Efficiency Variance