Laughlin, Inc., uses a standard costing system. The predetermined overhead rates are calculated using practical capacity. Practical capacity for a year is defined as 1,000,000 units requiring 200,000 standard direct labor hours. Budgeted overhead for the year is $750,000, of which $300,000 is fixed overhead. During the year, 900,000 units were produced using 190,000 direct labor hours. Actual annual overhead costs totaled $800,000, of which $294,700 is fixed overhead.

Required:

1.Calculate the fixed overhead spending and volume variances.

Fixed Overhead Spending Variance	$	- Select your answer -FavorableUnfavorableCorrect 2 of Item 1
Fixed Overhead Volume Variance	$	- Select your answer -FavorableUnfavorableCorrect 4 of Item 1

2.Calculate the variable overhead spending and efficiency variances.

Variable Overhead Spending Variance	$	- Select your answer -FavorableUnfavorableCorrect 6 of Item 1
Variable Overhead Efficiency Variance	$	- Select your answer -FavorableUnfavorableCorrect 8 of Item 1

Prepare the journal entries that reflect the following:

1. Assignment of overhead to production
2. Recognition of the incurrence of actual overhead
3. Recognition of overhead variances
4. Closing out overhead variances, assuming they are not material

a.	work in process
	fixed OH spending variance
	Variable OH spending variance
b.
c.
d.