How should factory overhead variances be treated in a journal entry to apply factory overhead?

 How should factory overhead variances be treated in a journal entry to apply factory overhead?
 
multiple choice
Factory overhead variances should be totaled together. If the resulting variance is unfavorable, the journal entry should receive a credit for the variance.
Factory overhead variances should be totaled together. If the resulting variance is favorable, the journal entry should receive a credit for the variance.
Factory overhead variances should be broken out into their individual components and reported separately as either debits or credits to their individual variance accounts. Correct
Factory overhead variances should be totaled together. If the resulting variance is favorable, the journal entry should receive a debit for the variance.

Explanation
Knowledge Check 01
 
Factory overhead variances should be broken out into their individual components and reported separately as either debits or credits to their individual variance accounts.