Closing the Balances in The Variance Accounts at the End of the Year

Yohan Company has the following balances in its direct materials and direct labor variance accounts at year-end:

	Debit	Credit
Direct Materials Price Variance	$13,750
Direct Materials Usage Variance		$1,210
Direct Labor Rate Variance		880
Direct Labor Efficiency Variance	$12,580

Unadjusted Cost of Goods Sold equals $1,540,000, unadjusted Work in Process equals $266,000, and unadjusted Finished Goods equals $260,000.

Required:

1. Assume that the ending balances in the variance accounts are immaterial and prepare the journal entries to close them to Cost of Goods Sold. Note: Close the variances with a debit balance first. If an amount box does not require an entry, leave it blank or enter "0".

		fill in the blank 39c1da034fd903f_2	fill in the blank 39c1da034fd903f_3
		fill in the blank 39c1da034fd903f_5	fill in the blank 39c1da034fd903f_6
		fill in the blank 39c1da034fd903f_8	fill in the blank 39c1da034fd903f_9
	Close variances with debit balance
		fill in the blank 39c1da034fd903f_11	fill in the blank 39c1da034fd903f_12
		fill in the blank 39c1da034fd903f_14	fill in the blank 39c1da034fd903f_15
		fill in the blank 39c1da034fd903f_17	fill in the blank 39c1da034fd903f_18
	Close variances with credit balance

What is the adjusted balance in Cost of Goods Sold after closing out the variances?

$fill in the blank 308b2dff4fdaf97_1

2. What if any ending balance in a variance account that exceeds $9,000 is considered material? (a) Close the immaterial variance accounts to Cost of Goods Sold. (b) Prorate the largest of the labor variances among Cost of Goods Sold, Work in Process, and Finished Goods on the basis of prime costs in these accounts. (c) Prorate the largest of the material variances among Cost of Goods Sold, Work in Process, and Finished Goods on the basis of prime costs in these accounts. The prime cost in Cost of Goods Sold is $1,050,000, the prime cost in Work in Process is $161,400, and the prime cost in Finished Goods is $136,000. If an amount box does not require an entry, leave it blank or enter "0".

Note: Round all interim calculations to three decimal places, and round your final answers to the nearest dollar. Adjust credit entry for rounding to ensure debits equal credits in journal entry.

(a)		fill in the blank c15daf02bf81fd4_2	fill in the blank c15daf02bf81fd4_3
		fill in the blank c15daf02bf81fd4_5	fill in the blank c15daf02bf81fd4_6
		fill in the blank c15daf02bf81fd4_8	fill in the blank c15daf02bf81fd4_9
(b)		fill in the blank c15daf02bf81fd4_11	fill in the blank c15daf02bf81fd4_12
		fill in the blank c15daf02bf81fd4_14	fill in the blank c15daf02bf81fd4_15
		fill in the blank c15daf02bf81fd4_17	fill in the blank c15daf02bf81fd4_18
		fill in the blank c15daf02bf81fd4_20	fill in the blank c15daf02bf81fd4_21
(c)		fill in the blank c15daf02bf81fd4_23	fill in the blank c15daf02bf81fd4_24
		fill in the blank c15daf02bf81fd4_26	fill in the blank c15daf02bf81fd4_27
		fill in the blank c15daf02bf81fd4_29	fill in the blank c15daf02bf81fd4_30
		fill in the blank c15daf02bf81fd4_32	fill in the blank c15daf02bf81fd4_33

What are the adjusted balances in Work in Process, Finished Goods, and Cost of Goods Sold after closing out all variances?

	Adjusted balance
Work in Process	$fill in the blank 726938f52fcbff6_1
Finished Goods	$fill in the blank 726938f52fcbff6_2
Cost of Goods Sold	$fill in the blank 726938f52fcbff6_3