Engraph Manufacturing Company uses standard direct labor hours as a basis for charging manufacturing overhead to Work-in-Process Inventory. The following data were taken from the records:

Data for August:

Actual variable manufacturing overhead. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $217,000

Actual fixed manufacturing overhead . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $265,700

Actual units produced. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8,000

Actual direct labor hours . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33,000

Annual budget data:

Budgeted variable manufacturing overhead cost . . . . . . . . . . . . . . . . . . . . . . . . . . $2,611,200

Budgeted fixed manufacturing overhead . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .$3,304,800

Budgeted units of production . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102,000

Budgeted direct labor hours . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 408,000

Required:

1. Compute the annual variable manufacturing overhead rate and annual fixed manufacturing overhead rate to be used to apply overhead to Work-in-Process Inventory.

2. Determine the variable overhead spending variance and the variable overhead efficiency variance for August.

3. Determine the fixed overhead budget variance and the volume variance for August.

4. Prepare the journal entry to transfer standard variable and fixed overhead costs to Work-in Process Inventory.