Question

Closing the Balances in The Variance Accounts at the End of the Year Yohan Company has the following balances in its direct materials and direct labor variance accounts at year-end: Debit Credit Direct Materials Price Variance $14,050 Direct Materials Usage Variance $1,280 Direct Labor Rate Variance 870 Direct Labor Efficiency Variance $12,760 Unadjusted Cost of Goods Sold equals $1,520,000, unadjusted Work in Process equals $296,000, and unadjusted Finished Goods equals $190,000.

Answer 1

Answer with working is given below

Credit Debit $26,810 1. Journal Cost of Goods Sold To Direct Material Price Variance To Direct Labor Efficiency variance (Being variance with Debit balance Closed off) $14,050 $12,760 $1,280 $870 Direct Material Usage variance Direct Labor rate variance To Cost of Goods sold (Being variance with Credit balance closed off) $2,150 Unadjusted Cost of Goods sold Add: Debit Less: Credit Adjusted Cost of Goods Sold $1,520,000 $26,810 $2,150 $1,544,660 2.a) Credit Debit $1,280 Closing immaterial variances Journal Direct Material Usage variance Direct Labor rate variance To Cost of Goods sold (Being variance with Credit balance closed off) $870 $2,150 2.b) Credit Journal Work in process Finished Goods Cost of Goods Sold To Direct Labor Efficiency Variance (Being Direct Labor Efficiency closed) Debit $450 $352 $11,958 $12,760 2.c) Credit Journal Work in process Finished Goods Cost of Goods Sold To Direct Material Price Variance (Being Direct Material Price variance closed) Debit $604 $472 $12,973 $14,050 Adjusted Balances Adjusted Balance Debit Credit Work in process Finished Goods Cost of Goods Sold Opening Balance $296,000 $190,000 $1,520,000 $1,054 $824 $24,932 Adjusted Balances $297,054 $190,824 $1,542,782 $2,150 Working note Prime Cost Allocation Total Allocation Direct Direct Labor Labor Material Material Efficiency Efficiency Price Price Variance Variance Variance Variance $2,958.432 $3,973.426 $11,958.432 $12,973.426 $449.905 $604.261 $449.905 $604.261 $351.663 $472.313 $351.663 $472.313 $3,760.000 $5,050.000 $12,760.000 $14,050.000 Cost of Goods sold Work in Process Finished Goods $1,060,000 $161,200 $126,000| $1,347,2001 79% 12% 9% 100%

Credit Debit $26,810 1. Journal Cost of Goods Sold To Direct Material Price Variance To Direct Labor Efficiency variance (Being variance with Debit balance Closed off) $14,050 $12,760 $1,280 $870 Direct Material Usage variance Direct Labor rate variance To Cost of Goods sold (Being variance with Credit balance closed off) $2,150 Unadjusted Cost of Goods sold Add: Debit Less: Credit Adjusted Cost of Goods Sold $1,520,000 $26,810 $2,150 $1,544,660 2.a) Credit Debit $1,280 Closing immaterial variances Journal Direct Material Usage variance Direct Labor rate variance To Cost of Goods sold (Being variance with Credit balance closed off) $870 $2,150 2.b) Credit Journal Work in process Finished Goods Cost of Goods Sold To Direct Labor Efficiency Variance (Being Direct Labor Efficiency closed) | Debit $1,527 $1,193 $10,040 $12,760 2.c) Credit Journal Work in process Finished Goods Cost of Goods Sold To Direct Material Price Variance (Being Direct Material Price variance closed) Debit $1,681 $1,314 $11,055 $14,050 Adjusted Balances Adjusted Balance Debit Credit Adjusted Work in process Finished Goods Cost of Goods Sold Opening Balance $296,000 $190,000 $1,520,000 $3,208 $2,5071 $21,095 Balances $299,208 $192,507 $1,538,945 $2,150 Working note Prime Cost % Allocation Direct Labor Material Efficiency Price Variance Variance $10,039.786 $11,054.780 $1,526.805 $1,681.161 $1,193.409 $1,314.059 $12,760.000 $14,050.000 Cost of Goods sold Work in Process Finished Goods $1,060,000 $161,200 $126,000 $1,347,200 79% 12% 9% 100%