need help with 7 a) b) and c)

7b) should come out to 408,113 COG completed revised for conversion

info needed to solve below

blending department below

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%); i) 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 words). WIP-Blending Bal 6/1 $ 25,000 1b) Account Titles i) WIP-Blending Raw Material Inventory Debit S Credit 205,300 S 205,300 ii) S WIP-Blending Factory Payroll/Wages Payable 56,151 $ 56,151 iii) S 68,629 WIP-Blending Manufacturing Overhead 68,629 iv) S 314,160 WIP-Bottling WIP-Blending $ 314,160 1c) WIP-Blending 25,000 205,300 $ 314,160 WIP-Bottling 56,151 68,629 WIP-Bottling Bal 6/1 WIP-Blending $ 314,160 Bal 6/1 S Materials Labor S Overhead S Bal 6/30 S 40,920 Bal 6/30 Bal 6/1 S Purchase $ Raw Material Inventory 120,000 183,300 $ 205,300 WIP-Blending Finished Goods Inventory Bal 6/1 $ WIP-Bottling Bal 6/30 S 98,000 Bal 6/30 $ 2 (a) Opening Balance in WIP Bottling A/C Tfrd in Costs Bottle Costs Other Material Costs Conversion Costs Total OP WIP 55000 111000 18000 80500 264500 WIP Bottling Ale 264500 314160 Bal 6/1 WIP Blending Bottles Other Material Conversion Bal 6/30 2 (b) (0) Cost of Bottles added to Bottling Deptt No of units tfrd from Blending X $ 2.50 -280500 units X $ 2.50 701250 2 (0) (0) Cost of Other Materials added to Bottling Deptt 1/2 the Material Cost added to Blending Deptt from RM Inventory -1/2 X 205300 102650 Journal Entries Credit Account Titles WIP Bottling Raw Material Inventory Debit 701250 701250 102650 WIP Bottling Raw Material Inventory 102650 2 (b)(iv) T-Account Bal 6/1 WIP Blending Bottles Other Material Conversion Bal 6/30 WIP Bottling Ale 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 12801500 Blending during June 52,000 Units "to account for" 3:24/500 Units "accounted for 329,500 Note: the 3 row 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 #WWWWNUMBER#WW of units, NOT dollars!!! 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. Equivalent Units (ACCOUNTED FOR) Transferred in Other Materials (Blending costs) Bottles 52.000 52/000 33.800 Conversion Equivalent units in ending WIP- Bottling inventory 26/000 Equivalent units completed and transferred to Finished Goods" 272/500 272,500 272/500 1272,500 Total Equivalent units accounted for 1324,500 3a4/500 306,300 298,500 Note: The 3"row should be the first two rows added together. The 3 row for "Other" and Conversion WILL NOT equal the other columns in this table, nor will they equal the 3 row in the table for step 1 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 to 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 $ 55,000 34160 from Ibiv 369,160 Cost of Bottles 111.000 70,250 from 251 812/250 Other Material Costs 18,000 102 1650 Efrom 26 i 20/650 Conversion Costs 80,5003747340 from 2c 4541840 Total $ 264,500 1,492.400 ID 757,400 Note: The costs "transferred IN" that were transferred into Bottling once "completed and transferred OUT" of the Blending department. d) Step 2 part 2: Calculate cost per equivalent unit. Answers will be SSSDOLLARSSS per ####NUMBER### of units. Use the totals in b) and c) above to calculate the Cost per equivalent unit for each cost category. Use 4 decimal places to minimize rounding differences. Cost per Equivalent Unit Bottle Costs Other Material Transferred in Total Costs to be accounted for 3(e) 369,160 Equivalent units 3(b) 2247500 Cost Per Equivalent Unit 11376 812 250 324,500 12.5031 120.650 30% 300 10.3939 Conversion 454,840 298,500 1.5238 c) 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. Total cach 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 SSSSDOLLARSSSSSS not units. Round your answers to the nearest whole dollar Total 1242,244 Costs accounted for in dollars Other Material Transferred in Bottles Costs Conversion 130161 13,314 39619 304,996 |6821045 107,338 415,236 369,151 812,256 1201652 454.859 59,155 WIP -Ending balance Costs of goods completed and transferred out Total Costs accounted for 11,514,665 111756,914 Note: The total costs accounted for" in the bottom row should equal (off a few Ss for rounding) the totals "costs to account for" in the bottom row of the table in step 3 4) Sale of Finished Goods: Accounting for the analysis. As units are completed in the Bottling department, they are moved to Finished Goods Inventory where they are ready to be sold. The analysis above determines the dollar value of those completed units. a) Write the journal entry to move these costs from WIP-Bottling Inventory account to Finished Goods Inventory account. Post the JE to the WIP-Bottling and Finished Goods T-accounts attached at the end of the project. Determine the ending balance for WIP-Bottling account. Balance should equal first row from table in 3e. 1514, 665 Finbled goods inventory WIP-Botting goods DR CR WIP-Botting 1,514.665 Bulboll 264,500 1,514,665 FMikel Einsted goals EP Blonding 314,160 Bulbo ottles 7011250 ther matrol conversion 374,340 Ball8/20 1514.805 WIP byltingisi4885 102.650 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 $ 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 $ 183,300 Accounts Payable $ 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 $ 285,950 Accounts Payable $ 285,950 Raw Material Inventory Bal 6/1 $ 120,000 Purchase $ 285,950 $ 205,300 WIP Blending $ 102,650 WIP Bottling Bal 6/30 $ 98,000 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 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. Percent Completed Materials Conversion 700 400 Work in process, beginning Started into production Completed and transferred out Work in process, ending Units 56,000 290,500 280,500 66,000 750 251 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$ 25,000 Costs added to production during the period 330,080 Total cost to be accounted for $ 355,080 Costs accounted for as follows: Cost of ending work in process inventory $ 40,920 Cost of units completed and transferred out 314,160 Total cost accounted for $ 355,080 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%); i) 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 words). WIP-Blending Bal 6/1 $ 25,000 1b) Account Titles i) WIP-Blending Raw Material Inventory Debit S Credit 205,300 S 205,300 ii) S WIP-Blending Factory Payroll/Wages Payable 56,151 $ 56,151 iii) S 68,629 WIP-Blending Manufacturing Overhead 68,629 iv) S 314,160 WIP-Bottling WIP-Blending $ 314,160 1c) WIP-Blending 25,000 205,300 $ 314,160 WIP-Bottling 56,151 68,629 WIP-Bottling Bal 6/1 WIP-Blending $ 314,160 Bal 6/1 S Materials Labor S Overhead S Bal 6/30 S 40,920 Bal 6/30 Bal 6/1 S Purchase $ Raw Material Inventory 120,000 183,300 $ 205,300 WIP-Blending Finished Goods Inventory Bal 6/1 $ WIP-Bottling Bal 6/30 S 98,000 Bal 6/30 $ 2 (a) Opening Balance in WIP Bottling A/C Tfrd in Costs Bottle Costs Other Material Costs Conversion Costs Total OP WIP 55000 111000 18000 80500 264500 WIP Bottling Ale 264500 314160 Bal 6/1 WIP Blending Bottles Other Material Conversion Bal 6/30 2 (b) (0) Cost of Bottles added to Bottling Deptt No of units tfrd from Blending X $ 2.50 -280500 units X $ 2.50 701250 2 (0) (0) Cost of Other Materials added to Bottling Deptt 1/2 the Material Cost added to Blending Deptt from RM Inventory -1/2 X 205300 102650 Journal Entries Credit Account Titles WIP Bottling Raw Material Inventory Debit 701250 701250 102650 WIP Bottling Raw Material Inventory 102650 2 (b)(iv) T-Account Bal 6/1 WIP Blending Bottles Other Material Conversion Bal 6/30 WIP Bottling Ale 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 12801500 Blending during June 52,000 Units "to account for" 3:24/500 Units "accounted for 329,500 Note: the 3 row 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 #WWWWNUMBER#WW of units, NOT dollars!!! 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. Equivalent Units (ACCOUNTED FOR) Transferred in Other Materials (Blending costs) Bottles 52.000 52/000 33.800 Conversion Equivalent units in ending WIP- Bottling inventory 26/000 Equivalent units completed and transferred to Finished Goods" 272/500 272,500 272/500 1272,500 Total Equivalent units accounted for 1324,500 3a4/500 306,300 298,500 Note: The 3"row should be the first two rows added together. The 3 row for "Other" and Conversion WILL NOT equal the other columns in this table, nor will they equal the 3 row in the table for step 1 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 to 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 $ 55,000 34160 from Ibiv 369,160 Cost of Bottles 111.000 70,250 from 251 812/250 Other Material Costs 18,000 102 1650 Efrom 26 i 20/650 Conversion Costs 80,5003747340 from 2c 4541840 Total $ 264,500 1,492.400 ID 757,400 Note: The costs "transferred IN" that were transferred into Bottling once "completed and transferred OUT" of the Blending department. d) Step 2 part 2: Calculate cost per equivalent unit. Answers will be SSSDOLLARSSS per ####NUMBER### of units. Use the totals in b) and c) above to calculate the Cost per equivalent unit for each cost category. Use 4 decimal places to minimize rounding differences. Cost per Equivalent Unit Bottle Costs Other Material Transferred in Total Costs to be accounted for 3(e) 369,160 Equivalent units 3(b) 2247500 Cost Per Equivalent Unit 11376 812 250 324,500 12.5031 120.650 30% 300 10.3939 Conversion 454,840 298,500 1.5238 c) 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. Total cach 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 SSSSDOLLARSSSSSS not units. Round your answers to the nearest whole dollar Total 1242,244 Costs accounted for in dollars Other Material Transferred in Bottles Costs Conversion 130161 13,314 39619 304,996 |6821045 107,338 415,236 369,151 812,256 1201652 454.859 59,155 WIP -Ending balance Costs of goods completed and transferred out Total Costs accounted for 11,514,665 111756,914 Note: The total costs accounted for" in the bottom row should equal (off a few Ss for rounding) the totals "costs to account for" in the bottom row of the table in step 3 4) Sale of Finished Goods: Accounting for the analysis. As units are completed in the Bottling department, they are moved to Finished Goods Inventory where they are ready to be sold. The analysis above determines the dollar value of those completed units. a) Write the journal entry to move these costs from WIP-Bottling Inventory account to Finished Goods Inventory account. Post the JE to the WIP-Bottling and Finished Goods T-accounts attached at the end of the project. Determine the ending balance for WIP-Bottling account. Balance should equal first row from table in 3e. 1514, 665 Finbled goods inventory WIP-Botting goods DR CR WIP-Botting 1,514.665 Bulboll 264,500 1,514,665 FMikel Einsted goals EP Blonding 314,160 Bulbo ottles 7011250 ther matrol conversion 374,340 Ball8/20 1514.805 WIP byltingisi4885 102.650 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 $ 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 $ 183,300 Accounts Payable $ 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 $ 285,950 Accounts Payable $ 285,950 Raw Material Inventory Bal 6/1 $ 120,000 Purchase $ 285,950 $ 205,300 WIP Blending $ 102,650 WIP Bottling Bal 6/30 $ 98,000 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 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. Percent Completed Materials Conversion 700 400 Work in process, beginning Started into production Completed and transferred out Work in process, ending Units 56,000 290,500 280,500 66,000 750 251 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$ 25,000 Costs added to production during the period 330,080 Total cost to be accounted for $ 355,080 Costs accounted for as follows: Cost of ending work in process inventory $ 40,920 Cost of units completed and transferred out 314,160 Total cost accounted for $ 355,080