need help with 7 a) b) and c) 7b) should come out to 408,113 COG completed revised for conversion 7) Greg, the production manager for the Blending Department approached Martha, the production manager for the Packaging Department regarding the company's profit targets for the year ending June 30th. Based on preliminary profit figures, the company is within $2,5000 of the month's target profit. Greg has asked Martha to pull a few strings to assure they will reach their target and all employees will receive a bonus. Greg indicates that Martha can just change her estimate of the percentage completion of her ending work in process inventories. Martha is unsure. Greg says that he has worked hard to keep costs down in his department and does not want to lose his bonus because Martha couldn't keep her department under control. a) Would Martha need to increase or decrease the estimated percentage completion to increase the company's operating profit? Explain your answer. b) Since the cost categories, "transferred in" and "bottles" are not affected by the estimated percent of completion, we can limit our analysis here to the two categories that are affected by percent completion. Assume Martha were to change her estimated percentage completion by 10 in the desired direction. (Change % from 25% to 15% or 35%); 1) What will the revised equivalent units be for "Other Materials" and "Conversion" cost categories for the Bottling Department? Revised Equivalent Units Other Material Conversion Equivalent units in ending WIP- Packaging inventory Equivalent units completed and transferred to finished goods Total Equivalent units to account ii) What will the revised cost per equivalent unit be for "Other Materials" and "Conversion" cost categories for Bottling Department? Note: Use your "Total costs to account for" for each cost category from you work in Step 3 Revised Cost per Equivalent Unit Other Material Conversion Cost Per Equivalent Unit iii) Use the information from your "revised" calculations to complete the Revised Analysis" boxes in the table above. Revised Analysis Other Material Conversion WIP -Ending balance Costs of goods completed and transferred out Total Costs accounted for iv) Compare these costs with the amounts from your original calculation in 3e above. What impact does this Revised Analysis have on the company's balance sheet and income statement? Your comment should be between 30 and 50 words. Note: The bottom row "Total" here will EQUAL the bottom row Total from 3e above. (Maybe different due to rounding) c) Martha is concerned about doing this. Greg assures her inventory will correct itself in next month analysis when she reports correct percentages for July. Is what Greg proposing ethical? Is what he says about inventory correcting itself true? Address these questions with a comment (30 to 50 info needed to solve below $ WIP-Blending 25,000 Bal 6/1 1b) Account Titles WIP-Blending Raw Material Inventory Debit S i) Credit 205,300 $ 205,300 11) 56.151 WIP-Blending Factory Payroll / Wages Payable S 56,151 S 68,629 WIP-Blending Manufacturing Overhead S 68,629 iv) S 314,160 WIP-Bottling WIP-Blending S 314,160 1c) Bal 6/1 S Materials Labor S Overhead S WIP-Blending 25,000 205,300 S 314,160 WIP-Bottling 56,151 68,629 WIP-Bottling Bal 6/1 WIP-Blending $ 314,160 Bal 6/30 S 40,920 Bal 6/30 Bal 6/1 s Purchase s Raw Material Inventory 120,000 183,300 S 205,300 WIP-Blending Finished Goods Inventory Bal 6/1 S WIP-Bottling Bal 6/30 S 98,000 Bal 6/30 S 20) Opening Balance in WIP Bottling Al Tird in Costs Bottle Costa Other Material Costs Conversion Costs Total OP WIP 55000 111000 18000 80500 264500 WIP Boting. Ak 264500 314160 Bal 6/1 WIP Blending Bottles Other Material Conversion Bal 6/30 Cost of Bottles added to Bettling Deptt No of units fred from Blending XS 2.50 -280500 units X $ 2.50 701250 Cost or Other Materials added to Bottling Deptt 1/2 the Material Cost added to Blending Depet from RM Inventory -1/2 X 205300 102650 Journal Entries Credit Account Titles WIP Bottling Raw Material lovestory Debit 701250 701250 102650 WIP Bettling Raw Material Inventory 102650 T-Account Bal 61 WIP Blending Hettles Other Material Conversion Hal 610 WIP Bottling Ak 264500 314160 701250 102650 20 Conversion Costs of Bottling Deptt Conversion Cost of Blending Deptt - Labour+Overhead 56151 +68629 - 124780 Conversion Costs of Bottling Deptt - 3 X 124780 =374340 Direct Labour -40% of 374340 149736 Overhead =(374340-149736) 224604 Journal Entries Credit Account Titles WIP Bottling Wages payable Debit 149736 149736 224604 WIP Bottling Mfg Overhead 224604 T-Account Bal 6/1 WIP Blending Bottles Other Material Labour Overhead Bal 6/30 WIP Bottling A/C 264500 314160 701250 102650 149736 224604 Process costing of second department: Follow the steps below to perform the costing analysis for the Bottling department. Refer to VPW 3 Packet for examples on how to complete the tables a) Step 1 part 1: Account for physical units. Complete the tables below using #NUMBER of units, NOT dollars!!!!!! Physical units for BOTTLING Units in Bottling June 1 44.000 Units completed and transferred 272/500 out during June Units transferred in from Units in Bottling June 30 |2801500 Blending during June 52,000 Units to account for Units "accounted for Note: the grow should be the first 2 rows added together. The units to account for "should equal the units accounted for " b) Step 1 part 2: Determine equivalent units. This is NWNUMBER ONE of units, NOT dollarsil! For each of the 4 cost categories for Bottling Department, complete the table below to determine the equivalent units. Hint: All units completed and transferred to Finished Goods" and units in "ending WIP-Bottling inventory" are 100% complete with respect to transferred in" costs (costs from Blending department) and bottle costs. Equivalen Units (ACCOUNTED FOR) Transferred in Cher Materials (Blending costs Bortles 52.000 52000 33.800 Carwrsion 26.000 Equivalent units in ending WIP- Bottling inventory Equivalent units completed and transferred to Finished Goods" 272/500 273,500 272/500 272.00 Total Equivalent units accounted for 324,500 3a4,500 306,300 848/500 Note: The row should be the first two rows added together. The Irow for "Other" and Conversion WILL NOT equal the other columns in this table, nor will they qual the row in the table for step in a) above. c) Step 2 part 1: Make sure you complete the table Determine Costs to account for. These are SSSSDOLLARSSSSS not number of units. Costs "lo account for" is the sum of the beginning WIP-Bottling balance plus the costs that would have been added/assigned to the WIP-Bottling department during June. This information is summarized in the table above. Complete the table below using the information provided above. Bottling Department Summary of Costs to be accounted for WIP Bottling Costs Added Total Costs to be Cost Category beginning during June accounted for Transferred in from Blending S 55.000 34160 from Ibiv 369/160 Cost of Bottles 111.000 780 from 261 Other Material Costs 18,000 102/690 from 25 # 120/850 Conversion Costs 80 500 124,340 4547840 Total $ 264,500 1,492.42 ID2756/400 Note: The costs transferred INthat were transferred into Bottling ance completed and transferred OUT" of the Blending department d) Step 2 part 2: Calculate cost per equivalent unit. Answers will be SSSDOLLARSSS per NUMBERON of units. Use the totals in b) and e) above to calculate the Cost per equivalent unit for each cost category. Use 4 decimal places to minimize rounding differences. Cost per Equivalent Unit Other Material 120.650 Conversion 4541840 Transferred in Total Costs to be accounted for 3(e) 369,160 Equivalent units 3(b) 247500 Cost Per Equivalent Unit 1.1371 Bottle Costs 812/250 384,500 12.5031 103939 1.5238 .) Step 3: Allocate costs to units. Multiply the Cost per Equivalent for cach cost category in step 4 time the equivalent units for completed and transferred to Finished Goods and ending Inventory to complete the table below. ROUND YOUR ANSWERS TO NEAREST WHOLE DOLLARS. Add the cost categories together across to the Total Column. Totalcach column to the bottom row costs accounted for". The total in the bottom right box should be the total of the numbers above it AND the total of the numbers to its left it may be off a few dollars for rounding) Your answer represents 55SSDOLLARSSSSS5 not units. Round your answers to the carest wbole dollar Conds and for in dollars Ocher Material Traged in Bevices Com Commercio Total 130161 73,31439619 59,155 WIP -Ending balance Costs of goods completed and transformed out Total Corts med for | 242,244 11,514,665 304,946 11.766,914 680/095 107.338 415,236 812,256 120.652 454.859 369,151 Ne: The total costs acted for in the bottom row should equal off a few Se for runding the als de confor" in the hotel row of the table in step 4) Sale of Finished Goods: Accounting for the analysis. As units are completed in the Bottling department, they we moved to Finished Goods Inventory where they are ready to be sold. The analysis above determines the dollar value of those completed units *) Write the journal entry to move these costs from WIP-Boiling inventory account to Finished Goods Inventory account. Pout the Je to the WIP-Bottling and Finished Goods T-accounts attached at the end of the project. Determine the ending balance for WIP-Bowling account Balance should cqual first row from table in Je. DR 1514, 665 Finbled goods inventory WIP- Botting CR 1,514,665 INIP-Botting Bullor1 264,500 1514,665 Finished Einsted goods Bul 61 goals wipbotting styles EP efending 314/160 701,250 mler mabut 102,650 ottles Conversion 374 340 Bully 1514.165 b) Units sold = 272500 units i.e. Units transferred to Finished Goods from Bottling Department c) Sales Revenue = 272500 x $12 = $3270000 Account Titles Debit Credit Accounts Receivable s 3,270,000 Sales Revenue $ 3,270,000 d) Cost of Goods Sold = $1514665 Account Titles Debit Credit Cost of Goods Sold $ 1,514,665 Finished Goods Inventory 1,514,665 5) Purchases = $205300+98000-120000 = $183300 Account Titles Debit Credit Raw Material Inventory S 183,300 Accounts Payable s 183,300 Raw Material Inventory Bal 6/1 $ 120,000 Purchase $ 183,300 $ 205,300 WIP Blending Bal 6/30 $ 98,000 Alternative to 5, assuming material used in bottling department is from raw material issued. Purchases = $205300+102650+98000-120000= $285950 Account Titles Debit Credit Raw Material Inventory s 285,950 Accounts Payable 285,950 s Raw Material Inventory Bal 6/1 $ 120,000 Purchase $285,950 $ S Bal 6/30 $ 98,000 205,300 WIP Blending 102,650 WIP Bottling Requirement 6a Inventories Finished Goods Raw Materials WIP-Blending WIP-Bottling Total inventory June beg. June end $ $ $ 120,000 $ 98,000 $ 25,000 $ 40,920 $ 264,500 $ 242,235 $ 409,500 $ 381,155 Value of inventory at the beginning of June $ Value of inventory at the end of June $ 409,500 381,155 Requirement 6b 395,328 Average Inventory value for June (409500+381155)/2 Requirement 6c Sales Less-Cost of Goods sold Gross Margin Gross Margin % (1755335/3270000) $ 3,270,000 $ (1,514,665) $ 1,755,335 53.68% Cost of Goods sold Average Inventory Inventory Turnover (1514665/395328*12) $ $ 1,514,665 395,328 46 times Average sales period for June (360/46) 8 days blending department below Sunspot Beverages, Ltd., of Fiji uses the weighted average method in its process costing system. It makes blended tropical fruit drinks in two stages. Fruit juices are extracted from fresh fruits and then blended in the Blending Department. The blended juices are then bottled and packed for shipping in the Bottling Department. The following information pertains to the operations of the Blending Department for June. Work in process, beginning Started into production Completed and transferred out Work in process, ending Percent Completed Units Materials Conversion 56,000 700 400 290,500 280,500 66,000 750 250 Work in process, beginning Cost added during June Materials Conversion $ 19,100 $ 5,900 $ 205,300 $ 124,780 Required 1 Required 2 Required 3 Required 4 Required 5 Prepare a cost reconciliation report for the Blending Department for June. (Roun places.) Blending Department Cost Reconciliation Costs to be accounted for: Cost of beginning work in process inventory Costs added to production during the period Total cost to be accounted for Costs accounted for as follows: Cost of ending work in process inventory Cost of units completed and transferred out Total cost accounted for $ 25,000 330,080 $ 355,080 $ 40,920 314,160 $ 355,080 need help with 7 a) b) and c) 7b) should come out to 408,113 COG completed revised for conversion 7) Greg, the production manager for the Blending Department approached Martha, the production manager for the Packaging Department regarding the company's profit targets for the year ending June 30th. Based on preliminary profit figures, the company is within $2,5000 of the month's target profit. Greg has asked Martha to pull a few strings to assure they will reach their target and all employees will receive a bonus. Greg indicates that Martha can just change her estimate of the percentage completion of her ending work in process inventories. Martha is unsure. Greg says that he has worked hard to keep costs down in his department and does not want to lose his bonus because Martha couldn't keep her department under control. a) Would Martha need to increase or decrease the estimated percentage completion to increase the company's operating profit? Explain your answer. b) Since the cost categories, "transferred in" and "bottles" are not affected by the estimated percent of completion, we can limit our analysis here to the two categories that are affected by percent completion. Assume Martha were to change her estimated percentage completion by 10 in the desired direction. (Change % from 25% to 15% or 35%); 1) What will the revised equivalent units be for "Other Materials" and "Conversion" cost categories for the Bottling Department? Revised Equivalent Units Other Material Conversion Equivalent units in ending WIP- Packaging inventory Equivalent units completed and transferred to finished goods Total Equivalent units to account ii) What will the revised cost per equivalent unit be for "Other Materials" and "Conversion" cost categories for Bottling Department? Note: Use your "Total costs to account for" for each cost category from you work in Step 3 Revised Cost per Equivalent Unit Other Material Conversion Cost Per Equivalent Unit iii) Use the information from your "revised" calculations to complete the Revised Analysis" boxes in the table above. Revised Analysis Other Material Conversion WIP -Ending balance Costs of goods completed and transferred out Total Costs accounted for iv) Compare these costs with the amounts from your original calculation in 3e above. What impact does this Revised Analysis have on the company's balance sheet and income statement? Your comment should be between 30 and 50 words. Note: The bottom row "Total" here will EQUAL the bottom row Total from 3e above. (Maybe different due to rounding) c) Martha is concerned about doing this. Greg assures her inventory will correct itself in next month analysis when she reports correct percentages for July. Is what Greg proposing ethical? Is what he says about inventory correcting itself true? Address these questions with a comment (30 to 50 info needed to solve below $ WIP-Blending 25,000 Bal 6/1 1b) Account Titles WIP-Blending Raw Material Inventory Debit S i) Credit 205,300 $ 205,300 11) 56.151 WIP-Blending Factory Payroll / Wages Payable S 56,151 S 68,629 WIP-Blending Manufacturing Overhead S 68,629 iv) S 314,160 WIP-Bottling WIP-Blending S 314,160 1c) Bal 6/1 S Materials Labor S Overhead S WIP-Blending 25,000 205,300 S 314,160 WIP-Bottling 56,151 68,629 WIP-Bottling Bal 6/1 WIP-Blending $ 314,160 Bal 6/30 S 40,920 Bal 6/30 Bal 6/1 s Purchase s Raw Material Inventory 120,000 183,300 S 205,300 WIP-Blending Finished Goods Inventory Bal 6/1 S WIP-Bottling Bal 6/30 S 98,000 Bal 6/30 S 20) Opening Balance in WIP Bottling Al Tird in Costs Bottle Costa Other Material Costs Conversion Costs Total OP WIP 55000 111000 18000 80500 264500 WIP Boting. Ak 264500 314160 Bal 6/1 WIP Blending Bottles Other Material Conversion Bal 6/30 Cost of Bottles added to Bettling Deptt No of units fred from Blending XS 2.50 -280500 units X $ 2.50 701250 Cost or Other Materials added to Bottling Deptt 1/2 the Material Cost added to Blending Depet from RM Inventory -1/2 X 205300 102650 Journal Entries Credit Account Titles WIP Bottling Raw Material lovestory Debit 701250 701250 102650 WIP Bettling Raw Material Inventory 102650 T-Account Bal 61 WIP Blending Hettles Other Material Conversion Hal 610 WIP Bottling Ak 264500 314160 701250 102650 20 Conversion Costs of Bottling Deptt Conversion Cost of Blending Deptt - Labour+Overhead 56151 +68629 - 124780 Conversion Costs of Bottling Deptt - 3 X 124780 =374340 Direct Labour -40% of 374340 149736 Overhead =(374340-149736) 224604 Journal Entries Credit Account Titles WIP Bottling Wages payable Debit 149736 149736 224604 WIP Bottling Mfg Overhead 224604 T-Account Bal 6/1 WIP Blending Bottles Other Material Labour Overhead Bal 6/30 WIP Bottling A/C 264500 314160 701250 102650 149736 224604 Process costing of second department: Follow the steps below to perform the costing analysis for the Bottling department. Refer to VPW 3 Packet for examples on how to complete the tables a) Step 1 part 1: Account for physical units. Complete the tables below using #NUMBER of units, NOT dollars!!!!!! Physical units for BOTTLING Units in Bottling June 1 44.000 Units completed and transferred 272/500 out during June Units transferred in from Units in Bottling June 30 |2801500 Blending during June 52,000 Units to account for Units "accounted for Note: the grow should be the first 2 rows added together. The units to account for "should equal the units accounted for " b) Step 1 part 2: Determine equivalent units. This is NWNUMBER ONE of units, NOT dollarsil! For each of the 4 cost categories for Bottling Department, complete the table below to determine the equivalent units. Hint: All units completed and transferred to Finished Goods" and units in "ending WIP-Bottling inventory" are 100% complete with respect to transferred in" costs (costs from Blending department) and bottle costs. Equivalen Units (ACCOUNTED FOR) Transferred in Cher Materials (Blending costs Bortles 52.000 52000 33.800 Carwrsion 26.000 Equivalent units in ending WIP- Bottling inventory Equivalent units completed and transferred to Finished Goods" 272/500 273,500 272/500 272.00 Total Equivalent units accounted for 324,500 3a4,500 306,300 848/500 Note: The row should be the first two rows added together. The Irow for "Other" and Conversion WILL NOT equal the other columns in this table, nor will they qual the row in the table for step in a) above. c) Step 2 part 1: Make sure you complete the table Determine Costs to account for. These are SSSSDOLLARSSSSS not number of units. Costs "lo account for" is the sum of the beginning WIP-Bottling balance plus the costs that would have been added/assigned to the WIP-Bottling department during June. This information is summarized in the table above. Complete the table below using the information provided above. Bottling Department Summary of Costs to be accounted for WIP Bottling Costs Added Total Costs to be Cost Category beginning during June accounted for Transferred in from Blending S 55.000 34160 from Ibiv 369/160 Cost of Bottles 111.000 780 from 261 Other Material Costs 18,000 102/690 from 25 # 120/850 Conversion Costs 80 500 124,340 4547840 Total $ 264,500 1,492.42 ID2756/400 Note: The costs transferred INthat were transferred into Bottling ance completed and transferred OUT" of the Blending department d) Step 2 part 2: Calculate cost per equivalent unit. Answers will be SSSDOLLARSSS per NUMBERON of units. Use the totals in b) and e) above to calculate the Cost per equivalent unit for each cost category. Use 4 decimal places to minimize rounding differences. Cost per Equivalent Unit Other Material 120.650 Conversion 4541840 Transferred in Total Costs to be accounted for 3(e) 369,160 Equivalent units 3(b) 247500 Cost Per Equivalent Unit 1.1371 Bottle Costs 812/250 384,500 12.5031 103939 1.5238 .) Step 3: Allocate costs to units. Multiply the Cost per Equivalent for cach cost category in step 4 time the equivalent units for completed and transferred to Finished Goods and ending Inventory to complete the table below. ROUND YOUR ANSWERS TO NEAREST WHOLE DOLLARS. Add the cost categories together across to the Total Column. Totalcach column to the bottom row costs accounted for". The total in the bottom right box should be the total of the numbers above it AND the total of the numbers to its left it may be off a few dollars for rounding) Your answer represents 55SSDOLLARSSSSS5 not units. Round your answers to the carest wbole dollar Conds and for in dollars Ocher Material Traged in Bevices Com Commercio Total 130161 73,31439619 59,155 WIP -Ending balance Costs of goods completed and transformed out Total Corts med for | 242,244 11,514,665 304,946 11.766,914 680/095 107.338 415,236 812,256 120.652 454.859 369,151 Ne: The total costs acted for in the bottom row should equal off a few Se for runding the als de confor" in the hotel row of the table in step 4) Sale of Finished Goods: Accounting for the analysis. As units are completed in the Bottling department, they we moved to Finished Goods Inventory where they are ready to be sold. The analysis above determines the dollar value of those completed units *) Write the journal entry to move these costs from WIP-Boiling inventory account to Finished Goods Inventory account. Pout the Je to the WIP-Bottling and Finished Goods T-accounts attached at the end of the project. Determine the ending balance for WIP-Bowling account Balance should cqual first row from table in Je. DR 1514, 665 Finbled goods inventory WIP- Botting CR 1,514,665 INIP-Botting Bullor1 264,500 1514,665 Finished Einsted goods Bul 61 goals wipbotting styles EP efending 314/160 701,250 mler mabut 102,650 ottles Conversion 374 340 Bully 1514.165 b) Units sold = 272500 units i.e. Units transferred to Finished Goods from Bottling Department c) Sales Revenue = 272500 x $12 = $3270000 Account Titles Debit Credit Accounts Receivable s 3,270,000 Sales Revenue $ 3,270,000 d) Cost of Goods Sold = $1514665 Account Titles Debit Credit Cost of Goods Sold $ 1,514,665 Finished Goods Inventory 1,514,665 5) Purchases = $205300+98000-120000 = $183300 Account Titles Debit Credit Raw Material Inventory S 183,300 Accounts Payable s 183,300 Raw Material Inventory Bal 6/1 $ 120,000 Purchase $ 183,300 $ 205,300 WIP Blending Bal 6/30 $ 98,000 Alternative to 5, assuming material used in bottling department is from raw material issued. Purchases = $205300+102650+98000-120000= $285950 Account Titles Debit Credit Raw Material Inventory s 285,950 Accounts Payable 285,950 s Raw Material Inventory Bal 6/1 $ 120,000 Purchase $285,950 $ S Bal 6/30 $ 98,000 205,300 WIP Blending 102,650 WIP Bottling Requirement 6a Inventories Finished Goods Raw Materials WIP-Blending WIP-Bottling Total inventory June beg. June end $ $ $ 120,000 $ 98,000 $ 25,000 $ 40,920 $ 264,500 $ 242,235 $ 409,500 $ 381,155 Value of inventory at the beginning of June $ Value of inventory at the end of June $ 409,500 381,155 Requirement 6b 395,328 Average Inventory value for June (409500+381155)/2 Requirement 6c Sales Less-Cost of Goods sold Gross Margin Gross Margin % (1755335/3270000) $ 3,270,000 $ (1,514,665) $ 1,755,335 53.68% Cost of Goods sold Average Inventory Inventory Turnover (1514665/395328*12) $ $ 1,514,665 395,328 46 times Average sales period for June (360/46) 8 days blending department below Sunspot Beverages, Ltd., of Fiji uses the weighted average method in its process costing system. It makes blended tropical fruit drinks in two stages. Fruit juices are extracted from fresh fruits and then blended in the Blending Department. The blended juices are then bottled and packed for shipping in the Bottling Department. The following information pertains to the operations of the Blending Department for June. Work in process, beginning Started into production Completed and transferred out Work in process, ending Percent Completed Units Materials Conversion 56,000 700 400 290,500 280,500 66,000 750 250 Work in process, beginning Cost added during June Materials Conversion $ 19,100 $ 5,900 $ 205,300 $ 124,780 Required 1 Required 2 Required 3 Required 4 Required 5 Prepare a cost reconciliation report for the Blending Department for June. (Roun places.) Blending Department Cost Reconciliation Costs to be accounted for: Cost of beginning work in process inventory Costs added to production during the period Total cost to be accounted for Costs accounted for as follows: Cost of ending work in process inventory Cost of units completed and transferred out Total cost accounted for $ 25,000 330,080 $ 355,080 $ 40,920 314,160 $ 355,080