Algers Company produces dry fertilizer. At the beginning of the year, Algers had the following standard cost sheet:

Direct materials (5 lbs. @ $2.60)	$13.00
Direct labor (0.75 hr. @ $18.00)	13.50
Fixed overhead (0.75 hr. @ $4.00)	3.00
Variable overhead (0.75 hr. @ $3.00)	2.25
Standard cost per unit	$31.75

Algers computes its overhead rates using practical volume, which is 54,000 units. The actual results for the year are as follows:

1. Units produced: 53,000
2. Direct materials purchased: 274,000 pounds at $2.50 per pound
3. Direct materials used: 270,300 pounds
4. Direct labor: 40,100 hours at $17.95 per hour
5. Fixed overhead: $161,700
6. Variable overhead: $122,000

5. Prepare journal entries for the following:

1. The purchase of direct materials
2. The issuance of direct materials to production (Work in Process)
3. The addition of direct labor to Work in Process
4. The addition of overhead to Work in Process
5. The incurrence of actual overhead costs

If an amount box does not require an entry, leave it blank.

a.	Accounts PayableDirect Labor Efficiency VarianceDirect Labor Rate VarianceDirect Materials Price VarianceMaterials	- Select -	- Select -
	Direct Materials Price VarianceDirect Materials Usage VarianceFixed Overhead ControlMaterialsMiscellaneous Accounts	- Select -	- Select -
	Accounts PayableDirect Labor Efficiency VarianceDirect Labor Rate VarianceDirect Materials Usage VarianceFixed Overhead Control	- Select -	- Select -
b.	MaterialsMiscellaneous AccountsVariable Overhead ControlWages PayableWork in Process	- Select -	- Select -
	Direct Materials Price VarianceDirect Materials Usage VarianceFixed Overhead ControlMaterialsMiscellaneous Accounts	- Select -	- Select -
	Accounts PayableDirect Labor Efficiency VarianceDirect Labor Rate VarianceDirect Materials Price VarianceMaterials	- Select -	- Select -
c.	MaterialsMiscellaneous AccountsVariable Overhead ControlWages PayableWork in Process	- Select -	- Select -
	Direct Labor Efficiency VarianceDirect Labor Rate VarianceDirect Materials Price VarianceDirect Materials Usage VarianceFixed Overhead Control	- Select -	- Select -
	Direct Labor Rate VarianceDirect Materials Price VarianceDirect Materials Usage VarianceFixed Overhead ControlMaterials	- Select -	- Select -
	Fixed Overhead ControlMaterialsMiscellaneous AccountsVariable Overhead ControlWages Payable	- Select -	- Select -
d.	Accounts PayableDirect Labor Efficiency VarianceDirect Labor Rate VarianceWages PayableWork in Process	- Select -	- Select -
	Direct Materials Price VarianceDirect Materials Usage VarianceMaterialsMiscellaneous AccountsVariable Overhead Control	- Select -	- Select -
	Fixed Overhead ControlMaterialsMiscellaneous AccountsWages PayableWork in Process	- Select -	- Select -
e.	MaterialsMiscellaneous AccountsVariable Overhead ControlWages PayableWork in Process	- Select -	- Select -
	Fixed Overhead ControlMaterialsMiscellaneous AccountsWages PayableWork in Process	- Select -	- Select -
	Accounts PayableDirect Labor Efficiency VarianceDirect Labor Rate VarianceMaterialsMiscellaneous Accounts	- Select -	- Select -

f. Prepare journal entries for the closing out of variances to Cost of Goods Sold. If an amount box does not require an entry, leave it blank.

First, close direct materials and direct labor variances:

	Cost of Goods SoldDirect Labor Efficiency VarianceDirect Materials Price VarianceDirect Materials Usage Variance	- Select -	- Select -
	Cost of Goods SoldDirect Labor Efficiency VarianceDirect Labor Rate VarianceDirect Materials Usage Variance	- Select -	- Select -
	Direct Labor Rate VarianceDirect Materials Price VarianceDirect Materials Usage VarianceVariable Overhead ControlVariable Overhead Spending Variance	- Select -	- Select -
	Direct Labor Efficiency VarianceDirect Labor Rate VarianceDirect Materials Price VarianceVariable Overhead ControlVariable Overhead Spending Variance	- Select -	- Select -
	Cost of Goods SoldDirect Labor Rate VarianceDirect Materials Price VarianceVariable Overhead ControlVariable Overhead Spending Variance	- Select -	- Select -

Second, recognize the overhead variances: If an amount box does not require an entry, leave it blank.

	Cost of Goods SoldFixed Overhead ControlFixed Overhead Volume VarianceVariable Overhead ControlWork in Process	- Select -	- Select -
	Cost of Goods SoldFixed Overhead ControlVariable Overhead ControlVariable Overhead Spending VarianceWork in Process	- Select -	- Select -
	Cost of Goods SoldFixed Overhead ControlVariable Overhead ControlVariable Overhead Efficiency VarianceWork in Process	- Select -	- Select -
	Cost of Goods SoldFixed Overhead Spending VarianceFixed Overhead Volume VarianceVariable Overhead Efficiency VarianceVariable Overhead Spending Variance	- Select -	- Select -
	Cost of Goods SoldFixed Overhead ControlFixed Overhead Volume VarianceVariable Overhead Efficiency VarianceVariable Overhead Spending Variance	- Select -	- Select -
	Cost of Goods SoldFixed Overhead Volume VarianceVariable Overhead ControlVariable Overhead Efficiency VarianceVariable Overhead Spending Variance	- Select -	- Select -

Third, close the overhead variances: Note: Close the variances with a debit balance first. For compound entries, if an amount box does not require an entry, leave it blank.

	Cost of Goods SoldFixed Overhead Spending VarianceFixed Overhead Volume VarianceVariable Overhead Efficiency VarianceVariable Overhead Spending Variance	- Select -	- Select -
	Cost of Goods SoldFixed Overhead ControlFixed Overhead Volume VarianceVariable Overhead ControlWork in Process	- Select -	- Select -
	Cost of Goods SoldFixed Overhead ControlVariable Overhead ControlVariable Overhead Spending VarianceWork in Process	- Select -	- Select -
	Cost of Goods SoldFixed Overhead ControlVariable Overhead ControlVariable Overhead Efficiency VarianceWork in Process	- Select -	- Select -
	Cost of Goods SoldFixed Overhead Spending VarianceFixed Overhead Volume VarianceVariable Overhead Efficiency VarianceVariable Overhead Spending Variance	- Select -
	Cost of Goods SoldFixed Overhead Spending VarianceFixed Overhead Volume VarianceVariable Overhead Efficiency VarianceVariable Overhead Spending Variance		- Select -