Required information. [The following information applies to the questions displayed below] Patel and Sons Inc. uses a standard cost system to apply factory overhead costs to units produced. Practical capacity for the plant is defined as 54,600 machine hours per year, which represents 27,300 units of output. Annual budgeted fixed factory overhead costs are $273,000 and the budgeted variable factory overhead cost rate is $3.50 per unit. Factory overhead costs are applied on the basis of standard machine hours allowed for units produced. Budgeted and actual output for the year was 21,000 units, which took 43,600 machine hours. Actual fixed factory overhead costs for the year amounted to $262,600 while the actual variable overhead cost per unit was $3.40. Based on the information provided above, provide an appropriate end-of-year closing entry for each of the following two independent situations: (a) the net factory overhead cost variance is closed entirely to Cost of Goods Sold (CSG), and (b) the net factory overhead variance is allocated among WIP Inventory, Finished Goods Inventory, and CGS using the following percentages: 20%, 20%, and 60%, respectively. (Do not round intermediate calculations. Round your final answers to nearest whole dollar amount. If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
Required information. [The following information applies to the questions displayed below] Patel and Sons Inc. uses a standard cost system to apply factory overhead costs to units produced. Practical capacity for the plant is defined as 54,600 machine hours per year, which represents 27,300 units of output. Annual budgeted fixed factory overhead costs are $273,000 and the budgeted variable factory overhead cost rate is $3.50 per unit. Factory overhead costs are applied on the basis of standard machine hours allowed for units produced. Budgeted and actual output for the year was 21,000 units, which took 43,600 machine hours. Actual fixed factory overhead costs for the year amounted to $262,600 while the actual variable overhead cost per unit was $3.40. Based on the information provided above, provide an appropriate end-of-year closing entry for each of the following two independent situations: (a) the net factory overhead cost variance is closed entirely to Cost of Goods Sold (CSG), and (b) the net factory overhead variance is allocated among WIP Inventory, Finished Goods Inventory, and CGS using the following percentages: 20%, 20%, and 60%, respectively. (Do not round intermediate calculations. Round your final answers to nearest whole dollar amount. If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
Chapter2: Building Blocks Of Managerial Accounting
Section: Chapter Questions
Problem 5EA: Rose Company has a relevant range of production between 10,000 and 25.000 units. The following cost...
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Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
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![Required information
[The following information applies to the questions displayed below.]
Patel and Sons Inc. uses a standard cost system to apply factory overhead costs to units produced. Practical capacity for
the plant is defined as 54,600 machine hours per year, which represents 27,300 units of output. Annual budgeted fixed
factory overhead costs are $273,000 and the budgeted variable factory overhead cost rate is $3.50 per unit. Factory
overhead costs are applied on the basis of standard machine hours allowed for units produced. Budgeted and actual
output for the year was 21,000 units, which took 43,600 machine hours. Actual fixed factory overhead costs for the year
amounted to $262,600 while the actual variable overhead cost per unit was $3.40.
Based on the information provided above, provide an appropriate end-of-year closing entry for each of the following two independent
situations: (a) the net factory overhead cost variance is closed entirely to Cost of Goods Sold (CSG), and (b) the net factory overhead
variance is allocated among WIP Inventory, Finished Goods Inventory, and CGS using the following percentages: 20%, 20%, and 60%,
respectively. (Do not round intermediate calculations. Round your final answers to nearest whole dollar amount. If no entry is
required for a transaction/event, select "No journal entry required" in the first account field.)
View transaction list
Journal entry worksheet
<
1
2
Record the net variance closed to cost of goods sold.
Note: Enter debits before credits.
Transaction
General Journal
Debit
Credit](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F531ffe62-7f5e-4dae-b853-50e6814583d8%2F417de3da-af3e-4c2f-838a-de61192c104e%2Fe5o9us9_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Required information
[The following information applies to the questions displayed below.]
Patel and Sons Inc. uses a standard cost system to apply factory overhead costs to units produced. Practical capacity for
the plant is defined as 54,600 machine hours per year, which represents 27,300 units of output. Annual budgeted fixed
factory overhead costs are $273,000 and the budgeted variable factory overhead cost rate is $3.50 per unit. Factory
overhead costs are applied on the basis of standard machine hours allowed for units produced. Budgeted and actual
output for the year was 21,000 units, which took 43,600 machine hours. Actual fixed factory overhead costs for the year
amounted to $262,600 while the actual variable overhead cost per unit was $3.40.
Based on the information provided above, provide an appropriate end-of-year closing entry for each of the following two independent
situations: (a) the net factory overhead cost variance is closed entirely to Cost of Goods Sold (CSG), and (b) the net factory overhead
variance is allocated among WIP Inventory, Finished Goods Inventory, and CGS using the following percentages: 20%, 20%, and 60%,
respectively. (Do not round intermediate calculations. Round your final answers to nearest whole dollar amount. If no entry is
required for a transaction/event, select "No journal entry required" in the first account field.)
View transaction list
Journal entry worksheet
<
1
2
Record the net variance closed to cost of goods sold.
Note: Enter debits before credits.
Transaction
General Journal
Debit
Credit
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