The Brazil division of an American telecommunications company uses standard costing for its machine-paced production of telephone equipment. Data regarding production during June are as follows:

Variable manufacturing overhead costs incurred ………………………      $537,470

Variable manufacturing overhead cost rate …………..$7 per standard machine-hour

Fixed manufacturing overhead costs incurred ………………………..         $146,101

Fixed manufacturing overhead costs budgeted ………………………         $136,000

Denominator level in machine-hours ………………………………….                 68,000

Standard machine-hour allowed per unit of output …………………..               1.2

Units of output ………………………………………………………..                             66,500

Actual machine-hours used ……………………………………………                     75,700

Ending work-in-process inventory ……………………………………                             0

Required

1. Prepare an analysis of all manufacturing overhead variances. Use the 4-variance analysis framework illustrated in Exhibit 8-4 (page 304).

2. Prepare journal entries for manufacturing overhead costs and their variances.

3. Describe how individual variable manufacturing overhead items are controlled from day to day.

4. Discuss possible causes of the variable manufacturing overhead variances.