Question # 8? Using a spreadsheet and based on the information provided in the n
ID: 2548967 • Letter: Q
Question
Question # 8? Using a spreadsheet and based on the information provided in the next section, complete the following requirements: 1. 2. 3. Determine the predetermined overhead rate. Determine the total number of plastic cups to account for. Prepare an equivalent units schedule. The schedule should follow the format below; you may add additional information if you would like Whole Units Equivalent Units (Actual) Direct Materials Conversion Costs Beginning Start/Completed Completed/Transferred Out Ending xxX xxX 4. 5. 6. 7. Determine the total costs for the plastic and the unit plastic cost for the cups. Determine the total conversion cost and the conversion cost per cup. Determine the total equivalent cost per cup. 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 Fl Determine the amounts for the following. Show calculations for credit. FO costing. 8. 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) Tax Amount g) Net Income Prepare the necessary Journal Entries related to the manufacturing cycle for this accounting period. Use the account numbers in the Chart of Accounts, below, instead of the accounts names when writing the journal entries. 9.Explanation / Answer
Total production = Op WIP inventory + Units started in thsi period (i.e. Direct materials used, since direct materials are added in the beginning of process) - Closing WIP inventory = 300 + 2100 - 400 = 2000
Direct materials used = Beginning inventory + Purchase - closing = 350 + 1800 - 50 = 2100.
FOH Rate = FOH Cost / Estimted production = 6300 / 2100 = $3 per unit and Direct Labor rate = $5.63 per hour (11825/2100). Total Conversion costs = $8.63
8. a: Ending WIP: 400 units at per unit cost of $9.178 = $3671.20
Cost of 5.8 = Direct materials used + (% complete x FOH Rate) = 4 + (60% x 8.63) = 11.80
b. Ending FG inventory = 100 cups @ $12.63 (4 + 8.63) = $1263
c. Cost of goods sold = Total units sold = 2300 cups.
Op Cost of FG = 400 x 12.55 = 5020
Op WIP = 1715
Direct materials used = 2100 x 4 = 8200
Conversion costs = 11825 + 6600 = 18425
Less: Closing WIP = (3671.20)
Less: Closing FG inventory = (1263)
Therefore COGS = 5020 + 1715 + 8200 + 18425 - 3671.20 - 1263 = 28425.80
d. Total OH applied = (Total Production complete units + % completed in WIP Opening + % completed in WIP closing) = 2000 + 300 x 30% + 400 x 60% = 2330 units for full conversion cost.
Therefore total conversion cost applied = 2330 x $8.63 = $20107.90
Actual conversion costs = 6600 + 11825 = 18425
Therfore over applied conversion costs = 20107.90 - 18425 = 1682.90
e. Gross Margin = Sales - COGS = 2300 x 20 - 28425.80 = 17574.20
f. Selling exp = $250
g. Tax = (Gross margin - Selling exp) x 30% = 5197.26
h. Net profit = 12126.94