Disposition of variances An analysis of three accounts of Sandy Hill Company indicates that the ending balances consist of the following amounts of direct labor and direct materials:

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Direct materials .. Direct labor Work In Finished Cost of Process Goods Goods Sold $120,000 $180,000 $900,000 283,200 590,000 1,486,800 The ledger further indicates the following account balances for variances and raw materials: Raw Materials Inventory... Labor Rate Variance ... Labor Efficiency Variance. Material Price Variance Material Quantity Variance. Debit Credit 300,000 140,000 160,000 120,000 50,000 Company policy is to allocate variances to the Inventory and Cost of Goods Sold accounts if they exceed $25,000. Raw material price variances are prorated to all inventory balances.