Third, close the overhead variances:

Note: Close the variances with a debit balance first.Direct Materials, Direct Labor, and Overhead Variances, Journal Entries

Rand Company produces dry fertilizer. At the beginning of the year, Rand had the following standard cost sheet:

Overhead rates are computed using practical volume, which is $54,000$ units. The actual results for the year are as follows:

a$.$ Units produced: $53,000$

b$.$ Direct materials purchased: $265,000$ pounds @ $$2\mathrm{.}50$ per pound

c$.$ Direct materials used: $270,200$ pounds

d$.$ Direct labor: $40,100$ hours at $$17\mathrm{.}95$ per hour

e$.$ Fixed overhead: $$161,800$

f$.$ Variable overhead: $$122,100$