Reference no: EM132668840

Astinata Co. uses a standard job cost system and a denominator volume of 25,000 direct labour hours for allocating overhead.

• The actual output was 12,000 units, which cost $185,700 for direct labour (23,000 hours), $28,000 for variable overhead, and $150,000 for fixed overhead.
• The standard variable overhead per unit is $2 (2 hours @ $1 per hour), and the standard fixed overhead per unit is $10 (2 hours @ $5 per hour).
• All variances are immaterial and are closed to Cost of Sales at the end of the period.

Problem 1: The entry to close the fixed overhead variances includes a:

Credit to work in process for $120,000

Debit to Cost of Sales for $30,000

Credit to Cost of Sales for $30,000

Debit to the fixed overhead production volume variance for $5,000