Overhead Variances and Their Disposal

Warner Company has the following data for the past year:

Actual overhead	$492,500
Applied overhead:
Work-in-process inventory	$104,000
Finished goods inventory	208,000
Cost of goods sold	208,000
Total	$520,000

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 fc9616ffefb3fdb_1

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

		fill in the blank 1a1206fc5fc9fa0_2
			fill in the blank 1a1206fc5fc9fa0_4

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.

		fill in the blank 2e9bf7fb6fc4fa7_2	fill in the blank 2e9bf7fb6fc4fa7_3
		fill in the blank 2e9bf7fb6fc4fa7_5	fill in the blank 2e9bf7fb6fc4fa7_6
		fill in the blank 2e9bf7fb6fc4fa7_8	fill in the blank 2e9bf7fb6fc4fa7_9
		fill in the blank 2e9bf7fb6fc4fa7_11	fill in the blank 2e9bf7fb6fc4fa7_12

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	$104,000		$fill in the blank 3ae255063ffcfd9_1		$fill in the blank 3ae255063ffcfd9_2
Finished Goods Inventory	$208,000		$fill in the blank 3ae255063ffcfd9_3		$fill in the blank 3ae255063ffcfd9_4
Cost of Goods Sold	$208,000		$fill in the blank 3ae255063ffcfd9_5		$fill in the blank 3ae255063ffcfd9_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		fill in the blank 2f0713034feb048_2
			fill in the blank 2f0713034feb048_4
Variance material		fill in the blank 2f0713034feb048_6	fill in the blank 2f0713034feb048_7
		fill in the blank 2f0713034feb048_9	fill in the blank 2f0713034feb048_10
		fill in the blank 2f0713034feb048_12	fill in the blank 2f0713034feb048_13
		fill in the blank 2f0713034feb048_15	fill in the blank 2f0713034feb048_16