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 $13,750 DIE Variance Direct Materials $1,210 Usage Variance Direct Labor Rale 830 Variance Direct Labor $12,700 Efficiency Variance Unadjusted ed Cost of Goods Sold equals $1,590,000, unadjusted Work in Process cquals $276,000, and unadjusted Finished Goods equals s200,000. Required: 1. Assume that the ending balances in the variance accounts are immaterial and prepare the journal entries to close them to cost of Goods Sold. Note: Close the vanances with a debit balance first. If an amount box does not require an entry, leave it blank or enter "o". Cost of Goods Sold 26.490 Direct Materials Price Variance 13,750 Direct Labor Efficiency Variance 12,700 Close variances with debit balance 1,210 8 2,040 Direct Materials Usage Variance Direct Labor Rate Variance Cost of Goods Sold Case variances with credit balance Feedback Check My Work What is the adjusted balance in Cost of Goods Sald after closing out the variances? 1,614,41 Feedback Check My Work 2. What if any eriding balance in a variance account that exceeds $8,000 is cunsidered material? (a) Close the immaterial variance accounts to Cost of Goods Sold. (b) Prorate the largest of the labor variances among Cost of Goods Sold, Work in Process, and Finished Goods on the basis of prime costs in these accounts. (c) Prorate the largest of the material variences among Cost of Goods Sold, Work in Process, and Finished Goods on the basis of prime costs in these accounts. The prime cost in Cost of Goods Sold is $1,060,000, the prime cost in Work in Process is $161,000, and the prime cost in Finished Goods is $135,000. If an amount box does not require an entry, leave it blank or enter "O". Note: Round all interim calculations to three dedmal places, and round your final answers to the nearest dollar. Adjust credit entry for rounding to ensure debits equal credits in journal entry. (a) Direct Materials Usage Variance 1.210 Direct Labor Rate Variance 830 Cost of Goods Sold 2,040 (b) Work In Process Finished Goods Cost of Goods Sold Direct Labor Efficiency Variance 1,546 1,225 x 9.91 12,700 (c) Work in Process 1,674 X Finished Goods 1,337x 10,739 Cost of Goods Sold Direct Materials Price Variance 13,750 Feedback Check My Work What are the adjusted balances in Work in Process, Finished Goods, and Cost of Goods Sold after closing out all variances? Adjusted balance Work in Process $ Finished Goods Cost of Goods Sold