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".

	Cost of Goods Sold	fill in the blank 41b58ff7c019026_2	fill in the blank 41b58ff7c019026_3
	Direct Materials Price Variance	fill in the blank 41b58ff7c019026_5	fill in the blank 41b58ff7c019026_6
	Direct Labor Efficiency Variance	fill in the blank 41b58ff7c019026_8	fill in the blank 41b58ff7c019026_9
	Close variances with debit balance
	Direct Materials Price Variance	fill in the blank 41b58ff7c019026_11	fill in the blank 41b58ff7c019026_12
	Direct Labor Rate Variance	fill in the blank 41b58ff7c019026_14	fill in the blank 41b58ff7c019026_15
	Cost of Goods Sold	fill in the blank 41b58ff7c019026_17	fill in the blank 41b58ff7c019026_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 fc786c032042041_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 73766703dfb4fbb_2	fill in the blank 73766703dfb4fbb_3
		fill in the blank 73766703dfb4fbb_5	fill in the blank 73766703dfb4fbb_6
		fill in the blank 73766703dfb4fbb_8	fill in the blank 73766703dfb4fbb_9
(b)		fill in the blank 73766703dfb4fbb_11	fill in the blank 73766703dfb4fbb_12
		fill in the blank 73766703dfb4fbb_14	fill in the blank 73766703dfb4fbb_15
		fill in the blank 73766703dfb4fbb_17	fill in the blank 73766703dfb4fbb_18
		fill in the blank 73766703dfb4fbb_20	fill in the blank 73766703dfb4fbb_21
(c)		fill in the blank 73766703dfb4fbb_23	fill in the blank 73766703dfb4fbb_24
		fill in the blank 73766703dfb4fbb_26	fill in the blank 73766703dfb4fbb_27
		fill in the blank 73766703dfb4fbb_29	fill in the blank 73766703dfb4fbb_30
		fill in the blank 73766703dfb4fbb_32	fill in the blank 73766703dfb4fbb_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 e3329efe307a046_1
Finished Goods	$fill in the blank e3329efe307a046_2
Cost of Goods Sold	$fill in the blank e3329efe307a046_3

Can you focus more on problem 2 please thanks