Overhead Variances and Their Disposal Warner Company has the following data for the past year: Actual overhead $182,000 Applied overhead: Work-in-process inventory $44,000 Finished goods inventory 88,000 Cost of goods sold 88,000 Total $220,000 Warner uses the overhead control account to accumulate both actual and applied overhead. Required: 1. Calculate the overhead variance for the year. $ 38,000 Overapplied Feedback Check My Work Correct Provide the appropriate adjusting journal entry to close the overhead variance to Cost of Goods Sold. Overhead Control 38,000 Cost of Goods Sold 38,000 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 38,000 Inventory x 7,600 X Inventory x 15,200 X Finished Goods Inventory 15,200 Feedback Check My Work Partially correct Assume the variance calculated is material. After prorating, provide the final ending balances of these accounts. Unadjusted Prorated Overapplied Adjusted Balance Overhead Balance Work-in-Process Inventory $44,000 $ 7,600 36,400 Finished Goods Inventory $88,000 $ 15,200 72,800 Cost of Goods Sold $88,000 15,200 72,800 Feedback Check My Work If variance is material, it is prorated among Work in Process, Finished Goods, and Cost of Goods Sold. 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 38,000 Overhead Control 38,000 Variance material Inventory x 7,600 x Inventory x 15,200 X Cash x 15,200 Overhead Control 38,000