Overhead Variances and Their Disposal

Warner Company has the following data for the past year:

Actual overhead	$571,000
Applied overhead:
Work-in-process inventory	$120,000
Finished goods inventory	240,000
Cost of goods sold	240,000
Total	$600,000

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

Required:

Question Content Area

1. Calculate the overhead variance for the year.

$29,000 Overapplied

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.

	overhead control
	work in process inventory
	finished goods inventory
	cost of goods sold

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	$120,000		$fill in the blank		$fill in the blank
Finished Goods Inventory	$240,000		$fill in the blank		$fill in the blank
Cost of Goods Sold	$240,000		$fill in the blank		$fill in the blank

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	cost of goods sold	$	$
	overhead control	$	$
Variance material	work in process inventory	$	$
	finished goods inventory	$	$
	cost of goods sold	$	$
	overhead control	$	$

need all empty boxes/ ones with $