Manufacturing
Year-End Variance Proration
Allocating variances across WIP, Finished Goods, and COGS rather than just dumping them in COGS.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Work-in-Process Inventory | Asset (+) | 100.00 | - |
| Finished Goods Inventory | Asset (+) | 400.00 | - |
| Cost of Goods Sold | Expense (+) | 500.00 | - |
| Material Price Variance | Expense (-) | - | 1,000.00 |
💡 Accountant's Note
If variances are 'material,' auditors require you to spread the extra cost across all inventory that was touched by those costs, not just the items already sold.
Professional Excel Template
Get the automated version of this entry. Includes built-in IFRS checks, VAT calculators, and SAP-ready upload formats.
QA
Expert Analysis by Qusai Ahmad
General Accountant Supervisor & IFRS Specialist
Specialized in SAP GUI automation and Middle Eastern tax compliance. Building digital tools for the next generation of finance leaders.