Milsaps Company produces sportsmen’s digital scales. In preparing the current bu
ID: 2418312 • Letter: M
Question
Milsaps Company produces sportsmen’s digital scales. In preparing the current budget, Milsaps’ controller estimates a total of $290,000 in direct materials cost, $240,000 in direct labor cost, and $304,800 in manufacturing overhead costs. Since much of the production process requires skilled workers to assemble the scales, direct labor cost is used as the overhead application base. At the end of the period, Milsaps reported actual results as follows: direct materials cost of $289,000, direct labor cost of $208,000, and manufacturing overhead cost $259,490.
What is the journal entry to close overhead if the amount is considered to be insignificant? (Enter debit entries first followed by credit entries. Credit account titles are automatically indented when the amount is entered. Do not indent manually.)
Account and explanation
Debit
Credit
Bill Thomas, Bates & Hill’s controller, has received all the budgets prepared by the various operating units and is ready to compile the pro-forma financial statements for the first quarter. The company’s balance sheet of December 31 is as follows:
Problem 5-31 (Part Level Submission)
Strum Enterprises is a boutique guitar manufacturer. The company produces both acoustic and electric guitars for rising and established professional musicians. Claire Strum, the company’s sales manager, prepared the following sales forecast for 2015. The forecasted sales prices include a 5 percent increase in the acoustic guitar price and a 10 percent increase in the electric guitar price, to cover anticipated increases in raw materials prices.
Sales Price
1st Quarter
2nd Quarter
3rd Quarter
4th Quarter
Acoustic guitar sales
$1,290
400
540
390
660
Electric guitar sales
$2,580
290
110
130
130
(a)
Prepare Strum’s sales budget for 2015.
Sales Budget
1st Quarter
2nd Quarter
3rd Quarter
4th Quarter
Annual
Acoustic:
$
$
$
$
$
$
$
$
$
$
Electric:
$
$
$
$
$
$
$
$
$
$
Total revenue
$
$
$
$
$
Link to Text
Account and explanation
Debit
Credit
Explanation / Answer
Part 1
Manufacturing Overhead applied as percentage of labour cost. 304800/240000 127.0%