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Additional Analysis 1) Journal entry needed 2) Total cost per unit: Blending DM Blending CC Forming DM Forming CC Total cost per unit Check figure $ 10.45 3) Henkel Industries Income Statement For the Month Ending May 31 Per unit Total Sales Revenue Operating expenses Operating income 4) Inventory Analysis Units Cost WIP- Blending WIP- Forming Finished Goods 5A) Total cost per unit Blending DM Blending CC Forming DM Forming CC Total cost per unit 5B) Income Statement For the Month Ending May 31 Per unit Total Sales Revenue $ 2,979,600 Check figure Difference in operating income: Increase or Decrease when 60% is used? Briefly explain the reason for the difference. Also, if managers want to inflate earnings in a particular period, what can they do? Department Data - May			Production Cost Report: Blending Department - May
Information about units:			FLOW OF UNITS	Physical Units	DM EU	Conversion EU
Units in Beginning WIP	25,000		Units to account for:
Started during month	220,000		Beginning work in process	25,000
Units in Ending WIP	30,000		Started in production	220,000
			Total units to account for	245,000
Percentage of completion:
Direct materials	100%		Units accounted for:
Conversion	80%		Completed and transferred out	215,000	215,000	215,000
			Ending WIP	30,000	30,000	24,000
Costs in Beginning WIP			Total units accounted for	245,000	245,000	239,000
DM in beginning WIP	132500		Check figure	245,000
Conversion costs in beginning WIP	78300		FLOW OF COSTS	Total	DM	Conversion
			Costs to account for:
Cost information for the current month:			Beginning work in process	$ 210,800.00	$ 132,500.00	$ 78,300.00
DM traced to Dept during the month	1153750		Costs added during month	$ 1,816,350.00	$ 1,153,750.00	$ 662,600.00
DL traced to Dept during the month	45000		Total costs to account for	$ 2,027,150.00	$ 1,286,250.00	$ 740,900.00
MOH allocated to dept during the month	617600
			Cost per equivalent unit		$ 5.25	$ 3.10
			Costs accounted for:
			Completed and transferred out	$ 1,795,250.00	$ 1,128,750.00	$ 666,500.00
			Ending WIP	$ 231,900.00	$ 157,500.00	$ 74,400.00
			Total costs accounted for	$ 2,027,150.00	$ 1,286,250.00	$ 740,900.00
Directions:			Check figure	$ 2,027,150
1) Record the journal entry that needs to reflect the units completed and transferred out of the Blending Dept. during the month. 2) In addition to the transferred in costs, the Forming Dept. showed the following costs per equivalent unit on their May production cost report: Direct Material Cost/ EU= $ 1.50 Conversion Cost/ EU= $0.60THe controller wants to know the cost of making one unit of product in MAy, from START to FINISH. Show your calculations by listing each of the costs per EU from all of the departments that make up the total cost. Format the cost unit in dollars and cents. 3)During the month Henkel sold 180,000 of the units it produced during May at a slaes price of $30 per unit. Operrating expenses for the month totaled $525,000. The controller would like you to prepare a draft of the companyies income statement. she would like you to include information about the gross profit per unit, as well as the total for the month. Make sure you format everything in dollars and cents. 4) At the beginning of May, the company had no FInished Goods inventory and No WIP in the forming department. All units that transferred out of the blending dept. in May also made it completely through the forming dept. in May. The controller would like you to prepare an analysis of the companies ending WIP and FG inventory at MAy 31. a) How many units are in each Departments WIP? b)What is the cost balance for each Departments WIP? c)How many units are in Finished Goods Inventory? d) What is the total cost balance in finished Good Inventory?

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