Prorate Variances: SmurfKind-Merc Pharmaceuticals purchased 80,000 grams of deuterial oxide at a cost of $124,000 and 40,000 grams of milaidium chloride at a cost of $89.600. Standard costs for this quantity of deuterial oxide is $120,000, and the milaidium chloride was expected to cost $92.000. These chemicals are the ingredients in its accounting knowledge booster pill: Mind-Warp. During the period. 280.000 Mind- Warp pills were manufactured, of which 30,000 remain in finished goods.

Production of 280,000 Mind-Warps is expected to require 70,000 grams of deuterial oxide and 30,000 grams of milaidium chloride. Actual use was 71 ,000 grams of deuterial oxide and 29,500 grams of milaidium chloride. SmurfKind-Merc includes labor costs with its variable overhead for cost analysis purposes. The standard variable overhead cost for each Mind-Warp pill is 75 cents. During the period, actual variable overhead was $217,300. Variable overhead is applied to production based on machine-hours. The machine-hour standard for 280,000 pills is 3,500 hours. Actual machine-hour use during the month was 3,360 hours. Fixed costs are charged to period expense as incurred. There is no Work in Process Inventory.

Required:

a. Show the standard costs for each inventory account and Cost of Goods Sold in T accounts.

b. Prorate the variances to the appropriate accounts.