Calculate the a flexible-budget variance and b the

Question

        

Answer 1

The Journal entries for Factory overhead costs and standard cost variances refer to the information for Johnny Lee, Inc., in Exercise 15-45. Suppose that in a particular month the standard permitted machine hours for output generated were 5,500. As well, suppose that the denominator activity level for setting the predetermined overhead rate is 6,550 machine hours per month. Q1. Compute the (a) flexible-budget variance and (b) the production-volume variance for the particular month. Q2. Give summary journal entries to record the actual overhead costs and standard overhead cost applied to the production throughout the month. Q3. Give the journal entry to record the two overhead variances for the month. Q4. Suppose that the variances computed above represent total variances for the year. Provide the required journal entry to close such variances to the Cost of Goods Sold (CGS) account.