Answer Please!
Part Two:
Part Two Instructions Using a spreadsheet and based on the information provided in the next section, complete the following requirements: 1. Determine the predetermined overhead rate. 2. Determine the total number of plastic earphones to account for. 3. Prepare an equivalent units schedule. The schedule should follow the format below; you may add additional information if you would like. 4. Determine the total costs for the plastic and the unit plastic cost for each earphone. 5. Determine the total costs for the audio/electronic devices and the unit audio/electronic device amount per earphone. 6. Determine the total conversion cost and the conversion cost per earphone. 7. Determine the total equivalent cost per earphone. 8. Prepare a Cost of Production report. This report should show all costs transferred into Work-in-Process and the costs transferred to Finished Goods. This process uses FIFO costing. Use dollars and cents. 9. Determine the amounts for the following. Show calculations for credit. a) Ending Work-in-Process Inventory in Units AND Dollars b) Ending Finished Goods Inventory in Units AND Dollars c) Cost of Goods Sold d) Over/Under Applied Manufacturing Overhead e) Gross Margin f) Income before Taxes g) Tax Amount h) Net Income 10. Prepare the necessary Journal Entries related to the manufacturing cycle for this accounting period. Manufacturing Process Information Ellie's Earphones, Inc., started a small manufacturing plant that fabricates earphones that are noises cancelling. The manufacturing process starts by placing plastic in a mold to manufacture the earphones. Once the plastic form of earphones is inspected and completed then the audio/electronic pieces are inserted and the ear protectors attached. After the earphones are inspected, the earphones are transferred to finished goods. This process is completely automated. Direct material, plastic for the earphones, is added 100% at the beginning of the process. Audio/Electronic pieces along with ear protectors are added 100% at the end of the process. Conversion costs are added equally throughout the process. Conversion is 50% complete for the beginning inventory and 50% complete to the ending inventory work in process and the audio/electronic devices are 0% complete as to ending inventory. At the beginning of the accounting period, Ellie's Earphones, Inc., estimated that production would be 13,000 earphones. Our predetermined factory overhead rate is based on an estimated FOH of $117,000. This information is to be used to determine the application rate for factory overhead. - Estimated and actual direct labor costs totaled $13,100. - Actual factory overhead costs totaled $117,750. - The following information is available concerning direct materials. Direct Materials-Plastic BeginningInventoryPurchaseofStainlessSteelEndingInventory500poundsplastic@$15.00perpound1,000poundsplastic@$15.00perpound200poundsplastic@$15.00perpound One pound of insulated plastic makes 10 earphone frames. The company starts 13,000 earphones for the period. Direct Materials-Audio Electronics and Ear protectors The Work-in-Process account has the following information Beginning Work-in-Process contains 600 earphones with a cost of $249 that is transferred in to Beginning WIP Ending Work-in-Process contains 400 earphones The Finished Goods account has the following Information Beginning Finished Goods contains 300 earphones at $15.20 each Ending Finished Goods contains 500 earphones The selling price is \$200 per earphone and 13,000 earphones were sold. Selling and Administrative Costs totaled $80,000 and the tax rate is 30%. Ellie's Earphones, Inc. Cost of Production Report For the year ended December 31, 2022 Step (1) Determine the predetermined OH rate Step (2) Determine the total number of sets of earphones to account for - see example on page 8 Step (3) Determine the Equivalent Units Schedule - see example on page 8 Step (4) Determine the total costs for the plastic and the unit plastic cost per earphone set. Step (5) Determine the total costs for the audio/electronic devices and the unit audio/electronic cost per earphone set. Determine the total conversion cost and the conversion cost per earphone set using the predetermined rate. Round your answer to the nearest dollar. Step(7)Determinethetotalequivalentcostpersetofearphones(plasticcostperunit,plustheaudio/electroniccostperearphoneset,plustheconversioncostpersetofearphones).Step(8)PrepareaCostofProductionReport-seeprovidedexampleonpage10.UseFIFOcosting. Step (9) Ending WIP in Units and Dollars Step (10) Ending Finished Goods Inventory in Units and Dollars Step (11) COGS calculation Step (12) Over/Under Applied FOH Step (13) Prepare an Income Statement showing Gross Margin, Income before taxes, Tax Amount and Net Income. Round to the nearest dollar. Step (14) Prepare the necessary Journal Entries related to the manufacturing cycle for this accounting period. Use the account numbers in the chart of accounts, below, instead of the accounts names when writing the journal entries. a. In one journal entry record the purchase of the Plastic and the audio/electronic devices using cash. b. Record the materials transferred to WIP. Again use one journal entry to record the transfer of the plastic and the audio/electronic. c. Record the direct labor used using cash. d. Record the applied FOH e. Record the actual FOH using cash. f. Record the over or under applied FOH g. Record the sale of the goods on account along with the cost of the inventory that was sold. Combine both into one journal entry. Part Two Instructions Using a spreadsheet and based on the information provided in the next section, complete the following requirements: 1. Determine the predetermined overhead rate. 2. Determine the total number of plastic earphones to account for. 3. Prepare an equivalent units schedule. The schedule should follow the format below; you may add additional information if you would like. 4. Determine the total costs for the plastic and the unit plastic cost for each earphone. 5. Determine the total costs for the audio/electronic devices and the unit audio/electronic device amount per earphone. 6. Determine the total conversion cost and the conversion cost per earphone. 7. Determine the total equivalent cost per earphone. 8. Prepare a Cost of Production report. This report should show all costs transferred into Work-in-Process and the costs transferred to Finished Goods. This process uses FIFO costing. Use dollars and cents. 9. Determine the amounts for the following. Show calculations for credit. a) Ending Work-in-Process Inventory in Units AND Dollars b) Ending Finished Goods Inventory in Units AND Dollars c) Cost of Goods Sold d) Over/Under Applied Manufacturing Overhead e) Gross Margin f) Income before Taxes g) Tax Amount h) Net Income 10. Prepare the necessary Journal Entries related to the manufacturing cycle for this accounting period. Manufacturing Process Information Ellie's Earphones, Inc., started a small manufacturing plant that fabricates earphones that are noises cancelling. The manufacturing process starts by placing plastic in a mold to manufacture the earphones. Once the plastic form of earphones is inspected and completed then the audio/electronic pieces are inserted and the ear protectors attached. After the earphones are inspected, the earphones are transferred to finished goods. This process is completely automated. Direct material, plastic for the earphones, is added 100% at the beginning of the process. Audio/Electronic pieces along with ear protectors are added 100% at the end of the process. Conversion costs are added equally throughout the process. Conversion is 50% complete for the beginning inventory and 50% complete to the ending inventory work in process and the audio/electronic devices are 0% complete as to ending inventory. At the beginning of the accounting period, Ellie's Earphones, Inc., estimated that production would be 13,000 earphones. Our predetermined factory overhead rate is based on an estimated FOH of $117,000. This information is to be used to determine the application rate for factory overhead. - Estimated and actual direct labor costs totaled $13,100. - Actual factory overhead costs totaled $117,750. - The following information is available concerning direct materials. Direct Materials-Plastic BeginningInventoryPurchaseofStainlessSteelEndingInventory500poundsplastic@$15.00perpound1,000poundsplastic@$15.00perpound200poundsplastic@$15.00perpound One pound of insulated plastic makes 10 earphone frames. The company starts 13,000 earphones for the period. Direct Materials-Audio Electronics and Ear protectors The Work-in-Process account has the following information Beginning Work-in-Process contains 600 earphones with a cost of $249 that is transferred in to Beginning WIP Ending Work-in-Process contains 400 earphones The Finished Goods account has the following Information Beginning Finished Goods contains 300 earphones at $15.20 each Ending Finished Goods contains 500 earphones The selling price is \$200 per earphone and 13,000 earphones were sold. Selling and Administrative Costs totaled $80,000 and the tax rate is 30%. Ellie's Earphones, Inc. Cost of Production Report For the year ended December 31, 2022 Step (1) Determine the predetermined OH rate Step (2) Determine the total number of sets of earphones to account for - see example on page 8 Step (3) Determine the Equivalent Units Schedule - see example on page 8 Step (4) Determine the total costs for the plastic and the unit plastic cost per earphone set. Step (5) Determine the total costs for the audio/electronic devices and the unit audio/electronic cost per earphone set. Determine the total conversion cost and the conversion cost per earphone set using the predetermined rate. Round your answer to the nearest dollar. Step(7)Determinethetotalequivalentcostpersetofearphones(plasticcostperunit,plustheaudio/electroniccostperearphoneset,plustheconversioncostpersetofearphones).Step(8)PrepareaCostofProductionReport-seeprovidedexampleonpage10.UseFIFOcosting. Step (9) Ending WIP in Units and Dollars Step (10) Ending Finished Goods Inventory in Units and Dollars Step (11) COGS calculation Step (12) Over/Under Applied FOH Step (13) Prepare an Income Statement showing Gross Margin, Income before taxes, Tax Amount and Net Income. Round to the nearest dollar. Step (14) Prepare the necessary Journal Entries related to the manufacturing cycle for this accounting period. Use the account numbers in the chart of accounts, below, instead of the accounts names when writing the journal entries. a. In one journal entry record the purchase of the Plastic and the audio/electronic devices using cash. b. Record the materials transferred to WIP. Again use one journal entry to record the transfer of the plastic and the audio/electronic. c. Record the direct labor used using cash. d. Record the applied FOH e. Record the actual FOH using cash. f. Record the over or under applied FOH g. Record the sale of the goods on account along with the cost of the inventory that was sold. Combine both into one journal entry
