Question

Linus Inc. has budgeted overhead for August of $260,000 for variable costs and $435,000 for fixed costs. Actual costs for the month totaled $275,000 for variable (all Accounts Payable) and $445,000 for fixed (all Accumulated Depreciation). Allocated fixed overhead totaled $440,000. The company tracks each item in an overhead control account before allocations are made to individual jobs. Spending variances for August were $10,000 unfavorable for variable and $10,000 unfavorable for fixed.
The production-volume overhead variance was $5,000 favorable. 
Required a. Make two journal entries for the actual costs incurred – one for variable overhead and one for fixed overhead. 
b. Make two journal entries to record the variances for August – one for variable overhead and one for fixed overhead. 



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  • CreatedSeptember 19, 2013
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