Lungren Has Allocated Budgeted Construction Overhead for August of $260,000

Essay

Lungren has allocated budgeted construction overhead for August of $260,000 for variable costs and $440,000 for fixed costs.Actual costs for the month totalled $275,000 for variable and $445,000 for fixed.Allocated fixed overhead totalled $440,000.The company tracks each item in an overhead control account before allocations are made to individual jobs.Rate variances for August were $10,000 unfavourable for variable and $10,000 unfavourable for fixed.The production-volume overhead variance was $5,000 favourable.Required:
a.Prepare journal entries for the actual costs incurred.
b.Prepare journal entries to record the variances for August.