Overhead Variances and Their Disposal Warner Company has the following data for the past year: Actual overhead $828,000 Applied overhead: Work-in-process inventory $172,000 Finished goods inventory 344,000 Cost of goods sold 344,000 Total $860,000
Overhead Variances and Their Disposal Warner Company has the following data for the past year: Actual overhead $828,000 Applied overhead: Work-in-process inventory $172,000 Finished goods inventory 344,000 Cost of goods sold 344,000 Total $860,000
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter4: Activity-based Costing
Section: Chapter Questions
Problem 2CE: Warner Company has the following data for the past year: Warner uses the overhead control account to...
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Question
Warner Company has the following data for the past year:
| Actual overhead | $828,000 |
| Applied overhead: | |
| Work-in-process inventory | $172,000 |
| Finished goods inventory | 344,000 |
| Cost of goods sold | 344,000 |
| Total | $860,000 |
Transcribed Image Text: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
Variance material
Transcribed Image Text: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
32,000
Finished Goods Inventory
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Incorrect
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
$172,000
Finished Goods Inventory
$344,000
$
Cost of Goods Sold
$344,000
$4
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