Overhead Variances and Their Disposal

Warner Company has the following data for the past year:

Actual overhead	$470,000
Applied overhead:
Work-in-process inventory	$100,000
Finished goods inventory	200,000
Cost of goods sold	200,000
Total	$500,000

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

Required:

1. Calculate the overhead variance for the year.

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

	Work-in-Process Inventory Cash Cost of Goods Sold Finished Goods Inventory Overhead Control Work-in-Process Inventory
	Cash Cost of Goods Sold Finished Goods Inventory Overhead Control Work-in-Process Inventory

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.