Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

B C D E F G H DIRECTIONS Additional analysis 1) Journal entry needed WIP-Forming WIP-Blending 2) Total cost per unit: 3) 4) Inventory

image text in transcribedimage text in transcribedimage text in transcribedimage text in transcribedimage text in transcribedimage text in transcribed

B C D E F G H DIRECTIONS Additional analysis 1) Journal entry needed WIP-Forming WIP-Blending 2) Total cost per unit: 3) 4) Inventory Analysis WIP Inventory-Blending WIP Inventory-Forming Finished Goods Inventory 5A) Total cost per unit 5B) KL M N Henkel Industries Income Statement For the Month Ending May 31 Per unit Units Sold Sales price/unit Total Reconciling UNITS in End FG Inv Beg FG Ending Units Total Cost + Made -Sold Henkel Industries Income Statement For the Month Ending May 31 Per unit Total = End FG Now that you have completed the production cost report, the controller would like you to do a few more tasks. Use the space at the left to document your responses. IMPORTANT NOTE: Every figure on this spreadsheet (dollar amounts and units) should be cell referenced from elsewhere (not typed in) EXCEPT for the blue boxes (number of units sold, sales price per unit, WIP-Forming ending units and total cost, Beg FG units). You should only type in line labels and account names. To reference a cell in another worksheet, first select the cell where you want the answer and type =. Then, select the cell you want to get from a different sheet, and hit the Enter button. 1) How much cost, in total, needs to get transferred to the Forming Department? Complete the journal entry with the appropriate amount. 2) The controller wants to know the cost of making one unit of product in May, from START to FINISH (including both the Blending and Forming Departments). Show your calculations by listing each of the costs per EU from all of the departments that make up the total cost (e.g., Blending DM, Blending CC, etc.). FORMAT the cost per unit in dollars and cents and HIGHLIGHT the total cost per unit (use the spilling paint bucket icon to fill in the cell with neon yellow color.) 3) The controller would like you to prepare a draft of the company's income statement. In addition, she would like to see the sales price per unit, cost per unit, and gross profit per unit. Hint: See general ledger for the information about transactions that occurred during the month. On the general ledger worksheet, calculate the total operating expenses in cell F6 using a formula. 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 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 company's ending WIP and FG inventory at May 31. The controller wants to know the following: a) How many units are in each Department's ending WIP Inventory? b) What is the cost balance for each Department's ending WIP Inventory? c) How many units are in ending Finished Goods Inventory? (Use side purple box to figure it out.) d) What is the total cost balance in ending Finished Goods Inventory? 5) Although the production manager said that the units in WIP at the end of May were 80% of the way through the process, the controller knows that figure is somewhat subjective. She has talked to the assistant production manager, who believes the units were only about 60% complete. She wants you to run your spreadsheet using 60% as the percent of completion to see what impact the estimate has on A) total cost per unit, and B) the company's income statement for the month. IMPORTANT: BEFORE doing the analysis in Step 5, copy your May production cost report worksheet to a new tab and rename it "What-if 60%" To do this, right click on the May tab at the bottom of the screen and choose "move or copy" then check the box, "create a copy". Then right click on the new copied spreadsheet and choose "rename". 5A) Calculate the total cost per unit, using 60% as the percentage of completion. Highlight the total cost per unit. 5B) Complete the company's income statement for the month, using 60% as the percentage of completion. 5C) Calculate the difference in operating income between the two possible percentages of completion (80% vs 60%) and indicate which direction it went (higher or lower). 5D) Briefly explain WHY the difference in income occurs. 5E) In general, if managers want to inflate earnings in a particular period, what could they do? 6) Finally, put your name on the Grading Rubric worksheet and check to make sure you have completed all requirements. Then save your file and upload it to Blackboard. 5C) Difference in operating income: 5D) Briefly explain the reason for the difference. 5E) If managers want to inflate earnings in a particular period, what can they do? Lower or higher when 60% is used? 5 7 Excel Project #2 - Fall 2020 Process Costing Project PROJECT OVERVIEW Harrisburg Industries produces its product in two sequential departments: Blending and Forming. The old controller, who has just retired, has been manually preparing the production cost reports each month. The new controller would like you, as an intern, to develop an Excel-based production cost report for the month of MAY that will automatically calculate the cost per equivalent unit, etc., when the monthly information is dropped into a data area of the worksheet (the data area is shown as a blue box in the following worksheets). The controller has provided you with a basic template, but needs you to finish the spreadsheet by adding formulas and cell references as needed. The only place she ever wants to type in numbers is in the blue box. Although there are two departments, the controller wants you to focus your attention on the Blending department until she is sure that your spreadsheet will provide accurate information. As you begin to formulate the May spreadsheet, you'll need to get production and cost data for the 3 month of May. Some of the information can be found on last month's manually-prepared production cost report, while other pieces of information can be found in the May general ledger. In addition, the production supervisor has already reported that 220,000 units were started during May and that 30,000 units were 80% of the way completed at the end of the month. During your initial plant tour, you found out that all of the direct materials were added at the very beginning of the Blending process. 3 Once you finish the spreadsheet, the controller has more questions and tasks for you (see the 4 Additional Analysis worksheet after you have completed the May Production Cost Report). 5 5 B READ!!! 2 STEP-BY-STEP INSTRUCTIONS 31) Start with the May Blending Dept Cost Report. Fill in the information about units and percentages of completion in the May blue box. The blue box is the only place on the worksheet where you are allowed 5 to type in numbers. FORMAT percentages as %, not as decimals. Use the % formatting icon on the Excel 5 Ribbon (top bar of the screen) B 2 5 2) Fill in the cost information in the May blue box. (Hint on finding information: Gather information from April's cost report and from the General Ledger). Format in DOLLARS and CENTS using the $ formatting icon on the ribbon. If you get a ########## it simply means your column is not wide enough (if so, drag and drop the cell line so that the cell is wider, or double click on the cell line next to the column letter to auto-size the column width.) 33) Use cell references and formulas to populate the production cost report. For example, in cell E4 you 4should type in the following reference: =B3. In cell E6 you should type in the following formula: = 5 E4+E5. NOTE: DO NOT TYPE IN ANY NUMBERS. ALL CELLS SHOULD CONTAIN FORMULAS OR REFERENCES TO CELLS IN THE BLUE BOX. Harrisburg Industries is using the weighted-average method in its process costing system. 3 2 4) Make sure all of the cost information is in dollars and cents (use the $ format icon). 5) Clean up the spreadsheet formatting as necessary (for example, if anything is bold, change it back to regular font; get rid of unnecessary decimal places; align numbers properly, etc.) 36) Once you finish the production cost report, go to the "Additional Analysis" worksheet for additional requirements and directions. (Note: It is highly recommended that you meet with your instructor to have your report checked before you move on to the additional analysis. You will receive 1 bonus point on this assignment for doing so.) EXCEL HINTS -An easy way to make a cell reference is to type an = sign in the destination cell, and then use your cursor to select the cell you want (rather than typing the cell reference) and then press enter. The same process works for referencing a cell that is in a different worksheet than the destination cell. To multiply, use* Example: =B2*E3 To divide, use/ To add, use + Example: G20/A2 Example: =A3+A4 To subtract, use - Example: = B10-A8 -Make use of the AutoSum button (on the top ribbon) for adding cells together. YOU SHOULD USE CELL REFERENCES, rather than typing in numbers, whenever possible. Points will be deducted if you type in numbers where cell references could have been used. B 9 Department Data Information about units: Units in Beginning WIP Started during month Units in Ending WIP Percentage of completion: Direct materials Conversion Production Cost Report: Blending Department - MAY 25,000 220,000 FLOW OF UNITS Units to account for: Beginning work in process 30,000 100% 80% Costs in Beginning WIP Started in production Total units to account for Units accounted for: Completed and transferred out Ending WIP Total units accounted for Physical Units 25,000 220,000 245,000 DM EU Conversion EU 215,000 30,000 245,000 215,000 30,000 245,000 215,000 24,000 239,000 DM in beginning WIP $ 132,500 Conversion costs in beginning WIP $ 78,300 FLOW OF COSTS Total DM Conversion Cost information for the current month: DM traced to Dept during the month $ 1,153,750 DL traced to Dept during the month $ 45,000 Costs to account for: Beginning work in process Costs added during month Total costs to account for $ 210,800 $ 132,500 $ 78,300 $ 1,816,350 $ 1,153,750 $ 662,600 $ 2,027,150 $ 1,286,250 $ 740,900 MOH allocated to dept during the month $ 617,600 Cost per equivalent unit 8.35 5.25 3.1 NOTE: The blue box contains the data you'll need for completing the Production Cost Report (gray box). Certain figures in the blue box must be typed in. Other figures in the blue box can be cell referenced from another worksheet (= cell address). ALL cells in the Production Cost Report (gray box) should be formulas or cell-referenced to figures in the blue box. DO NOT TYPE ANY FIGURES on the Production Cost Report or you will lose points on the assignment. Your goal is to create a Production Cost Report that can be used every month by just changing the data in the blue box. Costs accounted for: Completed and transferred out Ending WIP Total costs accounted for 1,795,250 1,128,750 666,500 231,900 157,500 74,400 2,027,150 1,286,250 740,900 Production Cost Report: Blending Dept.-APRIL FLOW OF UNITS Physical Units DM EU Conversion EU Units to account for: Beginning work in process Started in production Total units to account for Units accounted for: Completed and transferred out Ending WIP Total units accounted for FLOW OF COSTS Total Costs to account for: Beginning work in process Costs added during month Total costs to account for Cost per equivalent unit Costs accounted for: Completed and transferred out Ending WIP Total costs accounted for 25,000 DM Conversion $ 210,800 $ 132,500 $ 78,300 Production Cost Report: Forming Dept.-MAY FLOW OF UNITS Physical Units DM EU Conversion EU Units to account for: Beginning work in process Started in production Total units to account for Units accounted for: Completed and transferred out Ending WIP Total units accounted for FLOW OF COSTS Total DM Conversion Costs to account for: Beginning work in process Costs added during month Total costs to account for Cost per equivalent unit Costs accounted for: Completed and transferred out Ending WIP Total costs accounted for $ 1.50 $ 0.60 A May General Journal Entries- Partial list WIP-Blending Wages Payable (to record DL traced to the Blending Dept) WIP-Blending Raw materials inventory (to record DM traced to the Blending Dept) WIP-Blending MOH (to record MOH allocated to the Blending Dept) WIP- Forming Wages Payable (to record DL traced to the Forming Dept) WIP-Forming Raw materials inventory B D E F G H I J K L M Use a formula to find the total operating expenses for the month. $ 45,000 $ 45,000 For Income Statement: Total Operating Expenses = $ 460,000.00 $ 1,153,750 $ 1,153,750 REMEMBER: $ 617,600 S 617,600 S 750,000 $ 750,000 $ 45,000 $ 45,000 (to record DM traced to the Forming Dept) WIP- Forming MOH- Forming S 617,600 $ 617,600 (to record MOH allocated to the Forming Dept) Salary Expense Wages Payable $ 275,000 S 275,000 (to record salaries and wages of selling, general and admin. staff) Rent Expense $ 25,000 Rent Payable $ 25,000 (to record monthly rent) Insurance Expense Prepaid Insurance $ 30,000 $ 30,000 (to record Insurance on selling, general, and admin. Building) Accounts Receivable S 3,600,000 Sales Revenue $ 3,600,000 (to record the sale of 180,000 units at a price of $20 per unit) Utilities Expense $ 10,000 Utilities Payable $ 10,000 (to record Insurance on selling, general, and admin. Building) Advertising expense $ 120,000 Accounts Payable $ 120,000 (to record advertising expenses) Asset and Expense accounts are increased through debits (first line of a journal entry; left column of numbers) Liabilities and Revenue accounts are increased through credits (second line of a journal entry; right column of numbers) (Parenthetical explanation of transaction is listed below each journal entry)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Operations Management Processes And Supply Chains

Authors: Lee Krajewski, Naresh Malhotra, Larry Ritzman

13th Global Edition

129240986X, 978-1292409863

More Books

Students also viewed these Accounting questions

Question

Find the radius of convergence of? 1.2.3 1.3.5 (2n-1) r2n+1 -1

Answered: 1 week ago