I See The Light

Projected Income Statement

For the Period Ending December 31, 20x1

Sales 25,000 lamps @ $45.00 $1,125,000.00

Cost of Goods Sold @ $30.00 750,000.00

Gross Profit $375,000.00

Selling Expenses:

Fixed $23,000.00

Variable (Commission per unit) @ $3.00 75,000.00 $98,000.00

Administrative Expenses:

Fixed $42,000.00

Variable @ $2.00 50,000.00 92,000.00

Total Selling and Administrative Expenses: 190,000.00

Net Profit $185,000.00

I See The Light

Projected Balance Sheet

As of December 31, 20x1

Current Assets

Cash $34,710.00

Accounts Receivable 67,500.00

Inventory

Raw Material

Lamp Kits 500 @ $16.00 8,000.00

Work in Process 0 -

Finished Goods 3000 @ $30.00 90,000.00

Total Current Assets $200,210.00

Fixed Assets

Equipment $20,000.00

Accumulated Depreciation 6,800.00

Total Fixed Assets 13,200.00

Total Assets $213,410.00

Current Liabilities

Accounts Payable $54,000.00

Total Liabilities $54,000.00

Stockholder's Equity

Common Stock $12,000.00

Retained Earnings 147,410.00

Total Stockholder's Equity 159,410.00

Total Liabilities and Stockholder's Equity $213,410.00

Part 4 Process Costing - First in First out

General Information: The I See The Light Company has a related company that produces the figurines. They use process costing in the molding department. The factory overhead is applied at a rate of 50% of direct labor dollars. The material is added at the beginning of the process. The labor and overhead costs are assumed to be added uniformly throughout.

Month of January

Selected information for January is presented below. Note that the applied overhead rate was 50% of direct labor costs in the molding department.

Molding Department

Goods-in-process as of January 1 were 3,100 figurines at a cost of $50,530. Of this amount, $49,600 was from raw materials added, $620 for labor and $310 for overhead. These 3,100 figurines were assumed to be 10% complete as to labor and overhead.

During January, 25,000 units were started, $403,750 of materials and $46,580 of labor costs were incurred.

The 7,500 figurines that were in-process at the end of January were assumed to be 40% complete to labor and overhead.

All figurines in January passed inspection.

Background Information I SEE THE LIGHT (ISTL) is a subchapter S corporation that manufactures children's lampsightlights for use in bedrooms. These lamps are sold nationwide through a group of independent sales representatives who have an exclusive sales region. The business is in its tenth year and has asked you to assist in planning for next year's operations The lamps are ceramic figurines of animals, boats, boys and girls playing and singing, all in delightful colors. The owner of the business, Big Al, creates a drawing for the figurine and faxes it to a plant in China where a mold is created and a sample produced and hand painted. If the mold meets the expectations of Big Al an order of 500 lamp parts is placed. Each lamp kit consists of the parts required to complete one lamp, a figurine, a lamp shade and the required electrical components. There are presently 10 different figurines that come in six different colors, 60 models. There are presently 10 workers in the plant. They are responsible for receiving the raw material, manufacturing the product, packing and shipping. In addition to Big Al there are two office workers who are responsible for all administrative duties. 28 Big Al had his accountant prepare the projected Income Statement and Balance Sheet presented on page two. Big Al heard about your skills in managerial accounting and would like your assistance in the following areas: 30 32 Part 1 Part 2 Process Costing Job Order Costing 37 To upload your work to Big Al the file without changing the name. Pay attention to the specific location that Excel saves the file. Return to the bottom of the page that you downloaded the file from; Cybertext.com, The Book List, Building Blocks of Accounting-A Managerial Perspective, Enter password, Upload Your Excel File. If you upload an old version of the file the results will not update 41 42 43 44 Keep two copies of your spreadsheet in two separate places in case one of Big Al's competitors sends someone to destroy your work or it is lost in transmission 45 You may find it easier to work on this project if you print a hard copy of all the pages. 46 View Help Search Data Review Formulas insert Draw P age Layout General E EE For BS - AA A $ - % $8-28 Conditional Formatting MS Sans Serif BIV - 29 Wrap Text I Merge & Center Alignment Number at Painter BCD Round to two places, SA Cost of Direct Material incurred in Manufacturing Job 2407 {13.011 Cost of Direct Labor Incurred in Manufacturing Job 2407 [13.02) Cost of Manufacturing Overhead Applied to Job 2407 (13031 Cost of manufacturing one lamp (13.04 SONU 148 149 Introduction To 1 2 11 12 13 Type here to search HEWLET 10 A Copy Format Painter Clipboard MS Sans Serif BTU- Font E P 23 Wrap Text Merge & Center Alignment IcoE Total cost in the Beginning Inventory (Round to two places, 2 Total cost of Material this period (Round to two places, ##. . ) NUONNO Total cost of Conversion this period (Round to two places, ##.##### Total cost to account for (Round to two places, . . ) Cost per equivalent unit of Material this period (Round to seven places, Cost per equivalent unit of Conversion this period (Round to seven places Cost of the units transferred, material and convesion (Round to two places, S , Cost of the ending inventory, material and convesion (Round to two places, $ , Total Cost accounted for (Round to two places, S , HOLDING Physical Flow of Units (12.01) Work-in-Process - Beginning Units Started this Period Units to Account for {12.02) Total transferred out Work-in-Process - Ending Total Accounted for (12.03) (12.04) (12.05) Equivalent Units Material (Round to three places, #.###.# (12.06) Equivalent Units Conversion (Round to three places, ##.###.## (1207) 87 Total cost in the Beginning Inventory (Round to two places, (12.08) 89 .) (12.09) 99 100 101 102 Total cost of Material this period (Round to two places, . 111 112 113 114 115 Total cost of Conversion this period (Round to two places, 124 125 125 127 Totalnetin arenant and in h ace Introduction FAQ 1 2 11 . . (12.10) 12 13 Background Information I SEE THE LIGHT (ISTL) is a subchapter S corporation that manufactures children's lampsightlights for use in bedrooms. These lamps are sold nationwide through a group of independent sales representatives who have an exclusive sales region. The business is in its tenth year and has asked you to assist in planning for next year's operations The lamps are ceramic figurines of animals, boats, boys and girls playing and singing, all in delightful colors. The owner of the business, Big Al, creates a drawing for the figurine and faxes it to a plant in China where a mold is created and a sample produced and hand painted. If the mold meets the expectations of Big Al an order of 500 lamp parts is placed. Each lamp kit consists of the parts required to complete one lamp, a figurine, a lamp shade and the required electrical components. There are presently 10 different figurines that come in six different colors, 60 models. There are presently 10 workers in the plant. They are responsible for receiving the raw material, manufacturing the product, packing and shipping. In addition to Big Al there are two office workers who are responsible for all administrative duties. 28 Big Al had his accountant prepare the projected Income Statement and Balance Sheet presented on page two. Big Al heard about your skills in managerial accounting and would like your assistance in the following areas: 30 32 Part 1 Part 2 Process Costing Job Order Costing 37 To upload your work to Big Al the file without changing the name. Pay attention to the specific location that Excel saves the file. Return to the bottom of the page that you downloaded the file from; Cybertext.com, The Book List, Building Blocks of Accounting-A Managerial Perspective, Enter password, Upload Your Excel File. If you upload an old version of the file the results will not update 41 42 43 44 Keep two copies of your spreadsheet in two separate places in case one of Big Al's competitors sends someone to destroy your work or it is lost in transmission 45 You may find it easier to work on this project if you print a hard copy of all the pages. 46 View Help Search Data Review Formulas insert Draw P age Layout General E EE For BS - AA A $ - % $8-28 Conditional Formatting MS Sans Serif BIV - 29 Wrap Text I Merge & Center Alignment Number at Painter BCD Round to two places, SA Cost of Direct Material incurred in Manufacturing Job 2407 {13.011 Cost of Direct Labor Incurred in Manufacturing Job 2407 [13.02) Cost of Manufacturing Overhead Applied to Job 2407 (13031 Cost of manufacturing one lamp (13.04 SONU 148 149 Introduction To 1 2 11 12 13 Type here to search HEWLET 10 A Copy Format Painter Clipboard MS Sans Serif BTU- Font E P 23 Wrap Text Merge & Center Alignment IcoE Total cost in the Beginning Inventory (Round to two places, 2 Total cost of Material this period (Round to two places, ##. . ) NUONNO Total cost of Conversion this period (Round to two places, ##.##### Total cost to account for (Round to two places, . . ) Cost per equivalent unit of Material this period (Round to seven places, Cost per equivalent unit of Conversion this period (Round to seven places Cost of the units transferred, material and convesion (Round to two places, S , Cost of the ending inventory, material and convesion (Round to two places, $ , Total Cost accounted for (Round to two places, S , HOLDING Physical Flow of Units (12.01) Work-in-Process - Beginning Units Started this Period Units to Account for {12.02) Total transferred out Work-in-Process - Ending Total Accounted for (12.03) (12.04) (12.05) Equivalent Units Material (Round to three places, #.###.# (12.06) Equivalent Units Conversion (Round to three places, ##.###.## (1207) 87 Total cost in the Beginning Inventory (Round to two places, (12.08) 89 .) (12.09) 99 100 101 102 Total cost of Material this period (Round to two places, . 111 112 113 114 115 Total cost of Conversion this period (Round to two places, 124 125 125 127 Totalnetin arenant and in h ace Introduction FAQ 1 2 11 . . (12.10) 12 13