1. With respect to production costs, manufacturing overhead accumulates in the account and is applied to Work In Process based on the predetermine overhead rate or activity based cost rates.

It is rare that manufacturing overhead is cleared out naturally by this process.

If you have a debit balance in manufacturing overhead, the accounting department hasapplied manufacturing overhead to the WIP accounts. Is thisoverorunderapplied.(Answer should be over or under)

If the amount remaining at the end of the year is insignificant, the adjustment to clear the remaining manufacturing overhead balance is made to what other account?(the answer is the name of the general ledger account or type of the account).

2. Witham Company, which expects to start operations on January 1, 2018, will sell digital cameras in shopping malls. Witham has budgeted sales as indicated in the following table. The company expects a 10 percent increase in sales per month for February and March. The ratio of cash sales to sales on account will remain stable from January through March.

3. Determine the variance and indicate if each variance is favorable (F) or unfavorable (U).

Variances are absolute numbers so no ( ) or - for negative. Amounts are in whole dollars and can contain a $ and a comma or not. For example, $123,456 or 123456.

IndicateForUfor each variance.

Item

Budget

Actual

Variance

F or U

Sales price

$400

$390

Cost of goods sold

$192,500

$180,000

Materials usage

$90,000

$89,000

Sales revenue

$360,000

$390,000

Selling & Admin Expense

$24,500

$20,000

SalesJanuaryFebruaryMarch

Cash Sales$50,000

Sales on account$120,000

Total budgeted sales$170,000

Complete the sales budget by filling in the missing amounts.

Determine the amount of "sales revenue" Witham will report on its first quarter pro forma income statement. The amount is

Amounts are in whole dollars and can contain a $ and a comma or not. For example, $123,456 or 123456