Castinata 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.
The entry to close the variable overhead variances includes a:
A) Credit to the variable overhead efficiency variance for $1,000
B) Credit to work in process for $24,000
C) Credit to the variable overhead spending variance for $5,000
D) Debit to Cost of Sales for $4,000

Question

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The Answer of Castinata 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.
The entry to close the variable overhead variances includes a:
A) Credit to the variable overhead efficiency variance for $1,000
B) Credit to work in process for $24,000
C) Credit to the variable overhead spending variance for $5,000
D) Debit to Cost of Sales for $4,000