Problem $17-45($Static$)$ Prorating Overhead Costs $($LO $17-1)$

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

Actual variable manufacturing overhead

Applied fixed manufacturing overhead

Applied variable manufacturing overhead

Budgeted fixed overhead

Variable overhead efficiency variance

$$224,400$

$306,000$

$214,000$

$314,000$

$207,400$

$6,500U$

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.

Complete this question by entering your answers in the tabs below.

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.

Note: If no entry is required for a transaction$/$event$,$ select $"$No journal entry required" in the first account field.

$\backslash$table$[[$No$,$Event,General Journal,,Debit,Credit$],[$A$,1,$Actual variable overhead,$0,306,000,],[,$Accounts payable,$0,,306,000],[$B$,2,$Work$-$in$-$process inventory,$0,314,000,],[,$Applied variable overhead,$0,,314,000$