Question

- / FILE % Cut Calibri 1 1 AN === Wrap Text De Copy aste BIU - . » A == E Merge & Center - $ . % Format Painter Alignment Font Clipboard Number S.. A1 X ✓ fr Closing Variance and Overhead Accounts (Appendix). Gonzaga Products had A B C D E F G H 1 Closing Variance and Overhead Accounts (Appendix). Gonzaga Products had the following balances at the end of Credit Debit 10,000 8,000 Materials price variance Materials quantity variance Labor rate variance Labor efficiency variance Manufacturing overhead 6,000 5,000 14,000 10 Required: Prepare a journal entry to close the variance and manufacturing overhead accounts. Assume the balances are 11 not significant and thus are closed to cost of goods sold. Debit Credit Assume all products were sold and the company has no ending inventories. After making the entry, does the 10-21 22 23 24 10-27 10-29 30 31 32 33 10-26

Answer 1

Solution 1:

Journal Entries
Event	Particulars	Debit	Credit
1	Cost of goods sold Dr	$15,000.00
	Materials quantity variance Dr	$8,000.00
	Labor rate variance Dr	$6,000.00
	To Material price variance		$10,000.00
	To Labor efficiency variance		$5,000.00
	To Manufacturing overhead		$14,000.00
	(To close variances and manufacturing overhead)

Solution 2:

After making the entry, cost of goods sold in the income statement will reflect actual costs.