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Additional Analysis 1) Journal entry needed 2) Total cost per unit: Blending DM Blending CC Forming DM Forming CC Total cost per unit Check figure

Additional Analysis
1) Journal entry needed
2) Total cost per unit:
Blending DM
Blending CC
Forming DM
Forming CC
Total cost per unit Check figure $ 10.45
3)
Henkel Industries
Income Statement
For the Month Ending May 31
Per unit Total
Sales Revenue
Operating expenses
Operating income
4)
Inventory Analysis Units Cost
WIP- Blending
WIP- Forming
Finished Goods
5A) Total cost per unit
Blending DM
Blending CC
Forming DM
Forming CC
Total cost per unit
5B)
Income Statement
For the Month Ending May 31
Per unit Total
Sales Revenue
$ 2,979,600 Check figure
Difference in operating income: Increase or Decrease when 60% is used?
Briefly explain the reason for the difference. Also, if managers want to inflate earnings in a particular period, what can they do?
Department Data - May
Production Cost Report: Blending Department - May
Information about units: FLOW OF UNITS Physical Units DM EU Conversion EU
Units in Beginning WIP 25,000 Units to account for:
Started during month 220,000 Beginning work in process 25,000
Units in Ending WIP 30,000 Started in production 220,000
Total units to account for 245,000
Percentage of completion:
Direct materials 100% Units accounted for:
Conversion 80% Completed and transferred out 215,000 215,000 215,000
Ending WIP 30,000 30,000 24,000
Costs in Beginning WIP Total units accounted for 245,000 245,000 239,000
DM in beginning WIP 132500 Check figure 245,000
Conversion costs in beginning WIP 78300 FLOW OF COSTS Total DM Conversion
Costs to account for:
Cost information for the current month: Beginning work in process $ 210,800.00 $ 132,500.00 $ 78,300.00
DM traced to Dept during the month 1153750 Costs added during month $ 1,816,350.00 $ 1,153,750.00 $ 662,600.00
DL traced to Dept during the month 45000 Total costs to account for $ 2,027,150.00 $ 1,286,250.00 $ 740,900.00
MOH allocated to dept during the month 617600
Cost per equivalent unit $ 5.25 $ 3.10
Costs accounted for:
Completed and transferred out $ 1,795,250.00 $ 1,128,750.00 $ 666,500.00
Ending WIP $ 231,900.00 $ 157,500.00 $ 74,400.00
Total costs accounted for $ 2,027,150.00 $ 1,286,250.00 $ 740,900.00
Directions: Check figure $ 2,027,150

1) Record the journal entry that needs to reflect the units completed and transferred out of the Blending Dept. during the month.

2) In addition to the transferred in costs, the Forming Dept. showed the following costs per equivalent unit on their May production cost report:

Direct Material Cost/ EU= $ 1.50

Conversion Cost/ EU= $0.60THe controller wants to know the cost of making one unit of product in MAy, from START to FINISH. Show your calculations by listing each of the costs per EU from all of the departments that make up the total cost. Format the cost unit in dollars and cents.

3)During the month Henkel sold 180,000 of the units it produced during May at a slaes price of $30 per unit. Operrating expenses for the month totaled $525,000. The controller would like you to prepare a draft of the companyies income statement. she would like you to include information about the gross profit per unit, as well as the total for the month. Make sure you format everything in dollars and cents.

4) At the beginning of May, the company had no FInished Goods inventory and No WIP in the forming department. All units that transferred out of the blending dept. in May also made it completely through the forming dept. in May. The controller would like you to prepare an analysis of the companies ending WIP and FG inventory at MAy 31.

a) How many units are in each Departments WIP?

b)What is the cost balance for each Departments WIP?

c)How many units are in Finished Goods Inventory?

d) What is the total cost balance in finished Good Inventory?

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