(Variance disposition) Ito Manufacturing had the following variances at year-

end 1996:

a. Assuming that all variances are insignificant, prepare the journal entry at December 31 to dispose of them.

b. After posting your entry in part

a, what is the balance in Cost of Goods Sold?

c. Assuming that all variances are significant, prepare the necessary journal en¬ tries at December 31 to dispose of them.

d. What will be the balance in each of the inventory accounts and cost of goods sold account?LO1

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Material price variance Material quantity variance Labor rate variance $ 7,800 U 8,300 F 1,750 F Labor efficiency variance 12,300 U Variable overhead spending variance 1,000 U 600 F 2,200 F 5,600 U Variable overhead efficiency variance Fixed overhead spending variance Volume variance In addition, the inventory and cost of goods sold account balances were as follows at year-end 1996: Raw Material Inventory Work in Process Inventory Finished Goods Inventory Cost of Goods Sold 1547000 $112,931 .073 304,759 197 221,221.143 908,089 .587