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Gateshead Industries manufactures a single product and started the year with no inventories. Selected information about results for the period just ended include the following:

Actual fixed manufacturing overhead	$ 224,400
Actual variable manufacturing overhead	306,000
Applied fixed manufacturing overhead	214,000
Applied variable manufacturing overhead	314,000
Budgeted fixed overhead	207,400
Variable overhead efficiency variance	6,500	U

Thirty percent of this period's production has not been sold. There are never any work-in-process inventories.

Required:

a. Assume Gateshead writes off all variances to Cost of Goods Sold. Prepare the entries the company would make to record and close out the variances.

b. Assume Gateshead prorates all variances to the appropriate accounts. Prepare the entries the company would make to record and close out the variances.

Journal entry worksheet Record the closure of fixed overhead. Note: Enter debits before credits. Journal entry worksheet Record the variable overhead variances. Note: Enter debits before credits. Journal entry worksheet Record the closure of overhead cost variances to Cost of Goods Sold. Note: Enter debits before credits. Journal entry worksheet Record the application of variable overhead at standard rates to production. Note: Enter debits before credits. Journal entry worksheet Record the closure of overhead cost variances to Cost of Goods Sold and Finished Goods Inventory. Note: Enter debits before credits. Journal entry worksheet Record the variable overhead variances. Note: Enter debits before credits. Journal entry worksheet Record the purchase of various variable overhead resources. Note: Enter debits before credits. Journal entry worksheet Record the application of variable overhead at standard rates to production. Note: Enter debits before credits. Journal entry worksheet Record the closure of fixed overhead. Note: Enter debits before credits. Journal entry worksheet Record the purchase of various variable overhead resources. Note: Enter debits before credits

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