4.1

Overhead Variances and Their Disposal Warner Company has the following data for the past year: Warner uses the overhead control account to accumulate both actual and applied overhead. Required: 1. Calculate the overhead variance for the year. Feedback T Check My Work If variance is material, it is prorated among Work in Process, Finished Goods, and Cost of Goods Sold. 3. What if the variance is of the opposite sign calculated in Requirement 1 ? Provide the appropriate adjusting journal entries for Requirements 1 and 2. For a compound transaction, if an amount box does not require an entry, leave it blank. V Check My Work If the variance is of the opposite sign, all entries in Requirement 1&2 will be reversed. What were debits will be credits and what were credits will be debits. Provide the appropriate adjusting journal entry to close the overhead variance to Cost of Goods Sold. Feedback Check My Work Actual OH - Applied OH= Over/Underapplied. If variance is not material, it is closed out to cost of goods sold. 2. Assume the variance calculated is material. After prorating, close the variances to the appropriate accounts. If an amount box does not require an entry, leave it blank