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	$14,450
Direct Materials Usage Variance		$1,250
Direct Labor Rate Variance		890
Direct Labor Efficiency Variance	$13,000

Unadjusted Cost of Goods Sold equals $1,520,000, unadjusted Work in Process equals $236,000, and unadjusted Finished Goods equals $280,000.

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 bf1b680a4074ff3_2	fill in the blank bf1b680a4074ff3_3
		fill in the blank bf1b680a4074ff3_5	fill in the blank bf1b680a4074ff3_6
		fill in the blank bf1b680a4074ff3_8	fill in the blank bf1b680a4074ff3_9
	Close variances with debit balance
		fill in the blank bf1b680a4074ff3_11	fill in the blank bf1b680a4074ff3_12
		fill in the blank bf1b680a4074ff3_14	fill in the blank bf1b680a4074ff3_15
		fill in the blank bf1b680a4074ff3_17	fill in the blank bf1b680a4074ff3_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 4aa62e063ff503f_1

2. What if any ending balance in a variance account that exceeds $10,000 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 $163,600, and the prime cost in Finished Goods is $131,000. 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 02b6c2030fb0fcd_2	fill in the blank 02b6c2030fb0fcd_3
		fill in the blank 02b6c2030fb0fcd_5	fill in the blank 02b6c2030fb0fcd_6
		fill in the blank 02b6c2030fb0fcd_8	fill in the blank 02b6c2030fb0fcd_9
(b)		fill in the blank 02b6c2030fb0fcd_11	fill in the blank 02b6c2030fb0fcd_12
		fill in the blank 02b6c2030fb0fcd_14	fill in the blank 02b6c2030fb0fcd_15
		fill in the blank 02b6c2030fb0fcd_17	fill in the blank 02b6c2030fb0fcd_18
		fill in the blank 02b6c2030fb0fcd_20	fill in the blank 02b6c2030fb0fcd_21
(c)		fill in the blank 02b6c2030fb0fcd_23	fill in the blank 02b6c2030fb0fcd_24
		fill in the blank 02b6c2030fb0fcd_26	fill in the blank 02b6c2030fb0fcd_27
		fill in the blank 02b6c2030fb0fcd_29	fill in the blank 02b6c2030fb0fcd_30
		fill in the blank 02b6c2030fb0fcd_32	fill in the blank 02b6c2030fb0fcd_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 e90beefe205b064_1
Finished Goods	$fill in the blank e90beefe205b064_2
Cost of Goods Sold	$fill in the blank e90beefe205b064_3