Transaction:

Applied fixed manufacturing overhead to work in process inventory using the fixed portion of the predetermined overhead rate multiplied by the number of direct labor hours allowed so manufacture 125,000 units. Actual fixed manufacturing overhead costs for the year were $2,450,000. Of this total $1,300,000 related to items such as insurance, utilities and salaried indirect laborers that were all paid in cash and $1,150,000 related to depreciation of equipment.

Required: Prepare a journal entry

Fixed MFG Overhead Standard Hours: 2 hours Standard Price: $2 Standard Cost $4

Calculate the fixed overhead variances