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Overhead Variances and Their Disposal

Warner Company has the following data for the past year:

Actual overhead $$169,500$

Applied overhead:

Work$-$in$-$process inventory $$40,000$

Finished goods inventory $80,000$

Cost of goods sold $80,000$

Total $$200,000$

Warner uses the overhead control account to accumulate both actual and applied overhead.

Required:

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$1.$ Calculate the overhead variance for the year.

$fill in the blank e$9$d$169$fd$7003$f$87\_1$

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Provide the appropriate adjusting journal entry to close the overhead variance to Cost of Goods Sold.

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$2.$ Assume the variance calculated is material. After prorating, close the variances to the appropriate accounts. If an amount box does not require an entry, leave it blank.

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Assume the variance calculated is material. After prorating, provide the final ending balances of these accounts.

Unadjusted

Balance Prorated Overapplied

Overhead Adjusted

Balance

Work$-$in$-$Process Inventory $$40,000$ $fill in the blank $3872$a$1$fe$507$b$01$d$\_1$

$fill in the blank $3872$a$1$fe$507$b$01$d$\_2$

Finished Goods Inventory $$80,000$ $fill in the blank $3872$a$1$fe$507$b$01$d$\_3$

$fill in the blank $3872$a$1$fe$507$b$01$d$\_4$

Cost of Goods Sold $$80,000$ $fill in the blank $3872$a$1$fe$507$b$01$d$\_5$

$fill in the blank $3872$a$1$fe$507$b$01$d$\_6$

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$3.$ What if the variance is of the opposite sign calculated in Requirement $1?$ Provide the appropriate adjusting journal entries for Requirements $1$ and $2.$ For a compound transaction, if an amount box does not require an entry, leave it blank.

Variance immaterial

Variance material