Managerial Accounting
E11-18 Closing Variance Accounts
The variance summary for Bell Computers is as follows:
Bell Computers
Variance Summary
For the Year Ended December 31, 2015
Material price variance (3,540.00) favorable
Material quantity variance 3,880.00 unfavorable
Labor rate variance (1,640.00) favorable
Labor efficiency variance 5,540.00 unfavorable
Controllable overhead variance 2,640.00 unfavorable
Overhead volume variance 4,300.00 unfavorable
Total 11,180.00 unfavorable
At Bell Computers, the ending balance in Finished Goods Inventory is $114,646; the ending balance in Work in Process Inventory is $54,306, and the balance in Cost of Goods Sold is $434,448.
Prepare a journal entry to close the variance accounts at Bell Computers. Assume that the total variance is material and is apportioned among finished goods inventory, work in process inventory and cost of goods sold.
