Overhead Variances and Their Disposal

Warner Company has the following data for the past year:

Actual overhead	$212,500
Applied overhead:
Work-in-process inventory	$48,000
Finished goods inventory	96,000
Cost of goods sold	96,000
Total	$240,000

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

Required:

1. Calculate the overhead variance for the year. $fill in the blank a6eb68098064ff5_1

OverappliedUnderapplied

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

	CashCost of Goods SoldFinished Goods InventoryOverhead ControlWork-in-Process Inventory	- Select -
	CashCost of Goods SoldFinished Goods InventoryOverhead ControlWork-in-Process Inventory		- Select -

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.

	Cost of Goods SoldFinished Goods InventoryOverhead ControlRaw MaterialsWork-in-Process Inventory	- Select -	- Select -
	CashInventoryOverhead ControlRaw MaterialsWork-in-Process Inventory	- Select -	- Select -
	CashFinished Goods InventoryInventoryOverhead ControlRaw Materials	- Select -	- Select -
	CashCost of Goods SoldInventoryOverhead ControlRaw Materials	- Select -	- Select -

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	$48,000		$fill in the blank 39824201507001c_1		$fill in the blank 39824201507001c_2
Finished Goods Inventory	$96,000		$fill in the blank 39824201507001c_3		$fill in the blank 39824201507001c_4
Cost of Goods Sold	$96,000		$fill in the blank 39824201507001c_5		$fill in the blank 39824201507001c_6

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	CashCost of Goods SoldFinished Goods InventoryOverhead ControlWork-in-Process Inventory	- Select -
	CashCost of Goods SoldFinished Goods InventoryOverhead ControlWork-in-Process Inventory		- Select -
Variance material	CashInventoryOverhead ControlRaw MaterialsWork-in-Process Inventory	- Select -	- Select -
	CashFinished Goods InventoryInventoryOverhead ControlRaw Materials	- Select -	- Select -
	CashCost of Goods SoldInventoryOverhead ControlRaw Materials	- Select -	- Select -
	CashCost of Goods SoldFinished Goods InventoryOverhead ControlWork-in-Process Inventory	- Select -	- Select -