Milsap Company has the following data for the past year:

Milsap uses the overhead control account to accumulate both actual and applied overhead.
Required:
1. Calculate the overhead variance for the year and close it to Cost of Goods Sold.
2. Assume the variance calculated is material. After prorating, close the variances to the appropriate accounts and provide the final ending balances of these accounts.
3. What if the variance is of the opposite sign calculated in Requirement 1? Provide the appropriate adjusting journal entries for Requirements 1 and 2.LO1

Transcribed Image Text:

Actual overhead Applied overhead: Work-in-process inventory Finished goods inventory Cost of goods sold Total $ 960,000 $ 150,000 250,000 600,000 $1,000,000