f. Prepare Journal entries for the closing out of variances to Cost of Goods Sold. If an amount box does not require an entry, Ieave it blank. First, close direct materials and direct labor variances: Second, recognize the overhead variances: Third, close the overhead variances: Note: Close the variances with a debit balance first. Direct Materials, Direct Labor, and Overhead Variances, Journal Entries Rand Company produces dry fertilizer. At the beginning of the year, Rand had the following standard cost sheet: Overhead rates are computed using practical volume, which is 54,000 units. The actual results for the year are as follows: a. Units produced: 53,000 b. Direct materials purchased: 265,000 pounds @ $2.50 per pound c. Direct materials used: 270,300 pounds d. Direct labor: 40,100 hours at $17.95 per hour e. Fixed overhead: $161,600 f. Variable overhead: $122,000 Required: 1. Compute price and usage variances for direct materials. MPV \& MUV \& 2. Compute the direct labor rate and labor efficiency variances. Labor Rate Variance Labor Efficiency Variance Second, recognize the overhead variances: Third, close the overhead variances: Note: Close the variances with a debit balance first