Pratt, Inc., uses a standard costing system and develops its predetermined overhead rate from the annual flexible budget. The budget is based on an expected annual output of 40,000 units requiring total 160,000 budgeted direct labor hours. The company applied overhead based on direct labor hours. Annual budgeted overhead costs totaal $1,280,000of which $480,000 is variable overhead. A total of 30,000 units were produced during the year, using 100,000direct labor hours. Actual overhead costs incurred for the year were total $1,100,000 of which $320,000 were variable overhead costs.

1. Compute the variable overhead spending and efficency variances. Indicate whether the variiances are favorable or unfaborable

2.compute the fixed overhead budget and volume variances. indicate whether the variances are favorable or unfavorable.

3. For the case above, prepare JEs for the following:

a) Application of OH to production

b) Incurrence of actual OH

c) Recognition of OH variances

d) Closing out of OH variances