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.

View transaction list

Record the purchase of various variable overhead

resources.

Record the application of variable overhead at standard

rates to production.

Record the variable overhead variances.

D Record the closure of fixed overhead.

E Record the closure of overhead cost variances to Cost of

Goods Sold.

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Credit

$>$

Note : $=$ journal entry has been entered