OH variancesSari Inc. has a fully automated production facility in which almost 97 percent of overhead costs are driven by machine hours. As the company’s cost accountant, you have computed the...

OH variancesSari Inc. has a fully automated production facility in which almost 97 percent of overhead costs are driven by machine hours. As the company’s cost accountant, you have computed the following overhead variances for May:

The company’s president is concerned about the variance amounts and has asked you to show her how the variances were computed and to answer several questions. Budgeted fixed overhead for the month is $3,000,000; the predetermined variable and fixed overhead rates are, respectively, $20 and $40 per machine hour. Budgeted capacity is 60,000 units.

a. Using the four-variance approach, prepare an overhead analysis.Note: Do not use negative signs with your answers.

b. What is the standard number of machine hours allowed for each unit of output? Answer MHs per unitc. How many actual hours were worked in May? Answer hoursd. What is the total spending variance?Note:Do not use a negative sign in your answers.$Answer AnswerFavorableUnfavorableNeither favorable or unfavorablee. How would the overhead variances be closed if the three-variance approach were used and thevariances are considered insignificant?Note: Record any multiple debits or any multiple credits in alphabetical order by account name.