DEBIT CREDIT

Direct Materials Price Variance $14,150

Direct Materials Usage Variance $1,170

Direct Labor Rate Variance $830

Direct Labor Efficient Variance $12,520

Unadjusted Cost of Goods Sold equals $1,500,000, unadjusted Work in Process equals $256,000, and unadjusted Finished Goods equals $190,000

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".

COGS DR $26,670

Direct Materials Price Variance CR $14,150

Direct Labor Efficiency Variance CR $12,520

Close variances with debit balance

Direct Materials Usage Variance DR $1,170

Direct Labor Rate Variance DR $830

COGS CR $2,000

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 $165,000, and the prime cost in Finished Goods is $127,000. 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.