Manufacturing Process Information "Spartan Cases, Inc." started a small manufacturing plant that fabricates Aluminum Cases. The manufacturing process starts by acquiring aluminum from raw materials, molds them into the case form and then transfers them to finished goods. This process is completely automated. Direct material Aluminum is added 100% at the beginning of the process. Conversion costs are added equally throughout the process. Conversion is 40% complete for the beginning inventory work in process and 60% complete for the ending inventory work in process. At the beginning of the accounting period, "Spartan Cases, Inc." estimated that production would be 2,300 cases. Estimated factory overhead is $5,885.00. The estimated base for the predetermined overhead rate is 1,177 hours. This information is to be used to determine the application rate for overhead. Estimated and actual direct labor costs totaled $ 8,234.40. Actual factory overhead costs totaled $9,325.00. The following information is available concerning the direct materials. Direct Materials-Aluminum Beginning inventory Purchase of Aluminum Ending Inventory 500 pounds @ $2.00 per unit 3,000 pounds @ $2.00 per unit 300 pounds @ $2.00 per unit One pound of aluminum makes 1 Aluminum case. 1,800 cases were started. The work in process account has the following information: SS Beginning Work in Process contains 500 Aluminum Cases with a cost transferred in of $3,814.00. Ending work in process contains 300 Aluminum Cases. The finished goods account has the following Information: Beginning Finished Goods Ending Finished Goods Tax rate is 30% 300 Aluminum Cases @ $12 each = $3,600 400 Aluminum Cases The selling price of the case is $100 per case and 1,900 cases were sold. Selling and Administrative Costs totaled $2,500 and the tax rate is 30%. Part Two Instructions Equivalent Units Whole Units Direct Materials Conversion (Actual) Aluminum Costs Beginning XXX XXX XXX Start/Completed XXX XXX XXX Completed/Transferred Out XXX XXX XXX Ending XXX XXX XXX Using a spreadsheet and based on the information provided on the previous page, complete the following requirements: 1. Determine the predetermined overhead rate. 2. Determine the total number of aluminum cases to account for. 3. Prepare an equivalent units schedule. The schedule should follow the format above. 4. Determine the total cost for the aluminum and the unit aluminum cost for each case. 5. Determine the total conversion cost and the unit conversion cost per case. 6. Determine the total equivalent cost per case (Material Cost per unit plus the Conversion Cost per unit). 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. See example on page 11. Determine the amounts for the following. 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 at 30% h) Net Income (When calculating Net Income use the adjusted COGS) 7. Prepare the necessary Journal Entries related to the manufacturing cycle for this accounting period. The Chart of Accounts and Journal Entry Transactions are on page 13. Spartan's Cases, Inc. Cost of Production Report For the year ended December 31, 2022 DM Aluminum Conversion Costs Total Costs Beginning Balance Transferred In XXX Beginning Costs XXX XXX Started and Completed XXX XXX XXX Costs Transferred to Finished Goods XXX Ending Costs in Work-In-Process XXX Total Costs XXX XXX XXX Costs to Account For: Using a T-Account the COGM should be the same amount in the Cost of Production Report for Costs Transferred to Finished Goods and the WIP Process T-Account Work In Process T- Account Beginning Work-In Process COGM Direct Materials Direct Labor Applied Factory Overhead Ending WIP Steps for Part 2 Step (1) Step (2) Step (3) Step (4) Step (5) Step (6) Determine the predetermined OH rate Determine the total number of cases to account for-see example on page 9 Determine the Equivalent Units Schedule - see example on page 9 Determine the total costs for the aluminum and the unit aluminum cost per case. Determine the total conversion cost and the conversion cost per case using the predetermined rate. Round your answer to the nearest cent if needed. Determine the total equivalent cost per case (aluminum cost per unit, plus, the conversion cost per case). Step (7) Prepare a Cost of Production Report - see provided example on page 11. Use FIFO costing. Step (8) Ending WIP in Units and Dollars. Step (9) Ending Finished Goods Inventory in Units and Dollars Step (10) COGS calculation Step (11) Over/Under Applied FOH Step (12) Prepare an Income Statement showing Gross Margin, Income before taxes, Tax Amount and Net Income. Round to the nearest dollar. Step (13) Prepare the necessary Journal Entries related to the manufacturing cycle for this accounting period. Use the account numbers in the chart of accounts, on the next page, instead of the accounts names when writing the journal entries. Chart of Accounts 10000 Cash 11000 12000 13000 15000 15050 16000 20000 40000 50000 Accounts Receivable Material-Aluminum Inventory Work-In-Process WIP Factory Overhead FOH Finished Goods FG Wages Payable Sales COGS a. b. Record the purchase of the Aluminum using cash. Record the aluminum transferred to WIP. c. Record the direct labor in WIP that is on account. 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.