The following variances existed at year-end 2013 for Muckstadt Production Company:
Material price variance ............. $ 23,400 U
Material quantity variance ............. 24,900 F
Labor rate variance ............... 5,250 F
Labor efficiency variance ............. 36,900 U
Variance overhead spending variance ....... 3,000 U
Variance overhead efficiency variance ........ 1,800 F
Fixed overhead spending variance ......... 6,600 F
Volume variance ............... 16,800 U
In addition, the following inventory and Cost of Goods Sold account balances existed at year-end 2013:
Raw Material Inventory ........ $ 320,600
Work in Process Inventory ....... 916,000
Finished Goods Inventory ....... 641,200
Cost of Goods Sold ......... 2,702,200
a. Prepare the journal entry at December 31 to dispose of the variances, assuming that all are insignificant.
b. After posting your entry in (a), what is the balance in Cost of Goods Sold?
c. Prepare the journal entries at December 31 to dispose of the variances, assuming that all are significant. (Round to the nearest whole percentage.)
d. After posting your entries in (c), what are the balances in each inventory account and in Cost of Goods Sold?