Warner Company has the following data for the past year: Actual overhead $277,000 Applied overhead: Work-in-process inventory $60,000 Finished goods inventory 120,000 Cost of goods sold 120,000 Total $300,000 Warner uses the overhead control account to accumulate both actual and applied overhead. Required: Overapplied 1. Calculate the overhead variance for the year. Underapplied Cash Cost of Goods Sold Provide the appropriate adjusting journal entry to close the overhead variance to 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. #1 Cost of Goods Sold Cash Cash Cash #2 Finished Goods Inventory Inventory Finished Goods Inventory Cost of Goods Sold Overhead Control Overhead Control Inventory Inventory #3 Raw Materials Raw Materials Overhead Control Overhead Control #4 Work-in-Process Inventory Work-in-Process Inventory Raw Materials Raw Materials #1 #2 #3 #4 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 $60,000 Finished Goods Inventory $120,000 $ Cost of Goods Sold $120,000 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, an amount box does not require an entry, leave it blank. #1 Cash Cash Cash Cash Cash Variance immaterial Cost of Goods Sold Inventory Finished Goods Inventory Cost of Goods Sold Cost of Goods Sold Finished Goods Inventory Overhead Control Inventory Inventory Finished Goods Inventory Variance material Overhead Control Raw Materials Overhead Control Overhead Control Overhead Control #1 #2 #3 #4 #5 llll IIII I Work-in-Process Inventory Work-in-Process Inventory Raw Materials Raw Materials Work-in-Process Inventory #1 #2 #3 #4 #5