It's Year-End and You Have the Task of Clearing Up

question 49

Essay

It's year-end and you have the task of clearing up the final accounting entries for management accounting.There is an unfavourable direct materials rate variance of $25,000 which needs to be closed.The company uses the proration approach in this situation, and it has been determined that half of the variance should be charged to finished goods and half to cost of goods sold.Required:
Prepare the necessary entry for the end of period adjustment.

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Definitions:

Poorer Coordination

The ineffective organization and alignment of activities and tasks among members of a group, leading to suboptimal outcomes.

Specialization of Skills

The process of focusing on and becoming expert in a specific area of skills or knowledge, improving efficiency and effectiveness.

Matrix Organizational Structure

An organizational layout that assigns specialists from different functional departments to work on one or more projects led by a project manager.

Overlays

In organizational context, refers to additional or supplementary structures or systems laid on top of existing ones to address specific needs or challenges.