Prepare the Necessary Closing Entries Based on the Following Selected

question 166

Essay

Prepare the necessary closing entries based on the following selected accounts. $\begin{array}{lrr} \text { Accumulated Depreciation} &\$10,000\\ \text {Depreciation Expense } &6,000\\ \text { Owner's Capital } &20,000\\ \text {Owner's Drawings } &9,000\\ \text { Salaries and Wages Expense } &19,000\\ \text { Service Revenue} &40,000\\\end{array}$

Calculate variable and fixed overhead variances and identify them as favorable or unfavorable.

Understand and compute volume variances.

Calculate labor variances including rate and efficiency.

Compute direct materials price and quantity variances.

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Definitions:

Operating Costs

Expenditures that are necessary for the day-to-day operations of a business, including costs related to manufacturing, sales, and administration.

Interest Charges

Interest charges are the costs incurred by an entity for borrowing money, quantified as a percentage of the principal loan amount.

Assets

Economic resources or owned items of value that an individual, corporation, or country possesses, expected to provide future benefits.

Net Income

Net income refers to the total earnings of a company once all costs, expenses, and taxes are deducted from the overall revenue.