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		$1,230
Direct Labor Rate Variance		850
Direct Labor Efficiency Variance	$12,460

Unadjusted Cost of Goods Sold equals $1,560,000, unadjusted Work in Process equals $286,000, and unadjusted Finished Goods equals $200,000.

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 4da577fd6fb9fe6_2	fill in the blank 4da577fd6fb9fe6_3
		fill in the blank 4da577fd6fb9fe6_5	fill in the blank 4da577fd6fb9fe6_6
		fill in the blank 4da577fd6fb9fe6_8	fill in the blank 4da577fd6fb9fe6_9
	Close variances with debit balance
		fill in the blank 4da577fd6fb9fe6_11	fill in the blank 4da577fd6fb9fe6_12
		fill in the blank 4da577fd6fb9fe6_14	fill in the blank 4da577fd6fb9fe6_15
		fill in the blank 4da577fd6fb9fe6_17	fill in the blank 4da577fd6fb9fe6_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 fdb8140b1f99009_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 $1,060,000, the prime cost in Work in Process is $165,800, and the prime cost in Finished Goods is $135,000. 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 73e62a038fcffb6_2	fill in the blank 73e62a038fcffb6_3
		fill in the blank 73e62a038fcffb6_5	fill in the blank 73e62a038fcffb6_6
		fill in the blank 73e62a038fcffb6_8	fill in the blank 73e62a038fcffb6_9
(b)		fill in the blank 73e62a038fcffb6_11	fill in the blank 73e62a038fcffb6_12
		fill in the blank 73e62a038fcffb6_14	fill in the blank 73e62a038fcffb6_15
		fill in the blank 73e62a038fcffb6_17	fill in the blank 73e62a038fcffb6_18
		fill in the blank 73e62a038fcffb6_20	fill in the blank 73e62a038fcffb6_21
(c)		fill in the blank 73e62a038fcffb6_23	fill in the blank 73e62a038fcffb6_24
		fill in the blank 73e62a038fcffb6_26	fill in the blank 73e62a038fcffb6_27
		fill in the blank 73e62a038fcffb6_29	fill in the blank 73e62a038fcffb6_30
		fill in the blank 73e62a038fcffb6_32	fill in the blank 73e62a038fcffb6_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 e0121d046049001_1
Finished Goods	$fill in the blank e0121d046049001_2
Cost of Goods Sold	$fill in the blank e0121d046049001_3