Hake Plastics manufactures two liter plastic bottles for the soda industry. The bottles are made in a one step process in which a petroleum based liquid is added at the beginning of the manufacturing process, and other chemicals needed to turn the liquid into a plastic bottle are added evenly throughout the remainder of the process. It requires one quart of the liquid plastic to manufacture one plastic bottle. Half the direct labor used in the process is added at the 30% point in the process where mixing is performed, and the remainder of the direct labor is added at the end of the process when the plastic is molded into its bottle shape by a molding machine operated by a worker. Manufacturing overhead is added evenly throughout the process at a rate of 125% of total direct material cost incurred. The finished plastic bottles are inspected at the end of the process after all costs have been added. All bottles that do not meet specifications are sold as scrap to a local recycler for $0.02 per bottle. The company expects that 1% of the total units in production during a given month will normally end up as scrap and the costs related to these spoiled units is attached to the good units that are transferred to finished goods. At the end of September, 1,000 gallons of liquid were still in process and were at the 60% stage of completion based on estimates of the production supervisors. During the month of October, 60,000 gallons of liquid were started in process. By the end of the month, 56,000 gallons had been turned into plastic bottles, 3,000 gallons of liquid were still in process, 20% complete. The attached information is available concerning costs for October production. REQUIRED: (1) Using the attached forms, prepare a Cost of Production Report for Hake Plastics for the month of October, assuming a FIFO cost flow. Convert the gallons of liquid into bottles for calculating both physical units and equivalent units. Round costs per equivalent unit to five decimal places and all other dollar amounts to the nearest whole dollar. (2) Compute the amount of over- or underapplied manufacturing overhead for the month of October and prepare the journal entry required to dispose of it assuming the company considers the amount insignificant (not material). (3) Prepare the journal entry(ies) required by the company to record the transfer of costs to Finished Goods Inventory for the month of October. HAKE PLASTICS INFORMATION FOR COSTS RELATED TO PROCESS COSTING PRODUCTION FOR MONTH OF OCTOBER Hake Plastics manufactures two liter plastic bottles for the soda industry. The bottles are made in a one step process in which a petroleum based liquid is added at the beginning of the manufacturing process, and other chemicals needed to turn the liquid into a plastic bottle are added evenly throughout the remainder of the process. It requires one quart of the liquid plastic to manufacture one plastic bottle. Half the direct labor used in the process is added at the 30% point in the process where mixing is performed, and the remainder of the direct labor is added at the end of the process when the plastic is molded into its bottle shape by a molding machine operated by a worker. Manufacturing overhead is added evenly throughout the process at a rate of 125% of total direct material cost incurred. The finished plastic bottles are inspected at the end of the process after all costs have been added. All bottles that do not meet specifications are sold as scrap to a local recycler for $0.02 per bottle. The company expects that 1% of the total units in production during a given month will normally end up as scrap and the costs related to these spoiled units is attached to the good units that are transferred to finished goods. At the end of September, 1,000 gallons of liquid were still in process and were at the 60% stage of completion based on estimates of the production supervisors. During the month of October, 60,000 gallons of liquid were started in process. By the end of the month, 56,000 gallons had been turned into plastic bottles, 3,000 gallons of liquid were still in process, 20% complete. The attached information is available concerning costs for October production. REQUIRED: (1) Using the attached forms, prepare a Cost of Production Report for Hake Plastics for the month of October, assuming a FIFO cost flow. Convert the gallons of liquid into bottles for calculating both physical units and equivalent units. Round costs per equivalent unit to five decimal places and all other dollar amounts to the nearest whole dollar. (2) Compute the amount of over- or underapplied manufacturing overhead for the month of October and prepare the journal entry required to dispose of it assuming the company considers the amount insignificant (not material). (3) Prepare the journal entry(ies) required by the company to record the transfer of costs to Finished Goods Inventory for the month of October. HAKE PLASTICS INFORMATION FOR COSTS RELATED TO PROCESS COSTING PRODUCTION FOR MONTH OF OCTOBER Hake Plastics manufactures two liter plastic bottles for the soda industry. The bottles are made in a one step process in which a petroleum based liquid is added at the beginning of the manufacturing process, and other chemicals needed to turn the liquid into a plastic bottle are added evenly throughout the remainder of the process. It requires one quart of the liquid plastic to manufacture one plastic bottle. Half the direct labor used in the process is added at the 30% point in the process where mixing is performed, and the remainder of the direct labor is added at the end of the process when the plastic is molded into its bottle shape by a molding machine operated by a worker. Manufacturing overhead is added evenly throughout the process at a rate of 125% of total direct material cost incurred. The finished plastic bottles are inspected at the end of the process after all costs have been added. All bottles that do not meet specifications are sold as scrap to a local recycler for $0.02 per bottle. The company expects that 1% of the total units in production during a given month will normally end up as scrap and the costs related to these spoiled units is attached to the good units that are transferred to finished goods. At the end of September, 1,000 gallons of liquid were still in process and were at the 60% stage of completion based on estimates of the production supervisors. During the month of October, 60,000 gallons of liquid were started in process. By the end of the month, 56,000 gallons had been turned into plastic bottles, 3,000 gallons of liquid were still in process, 20% complete. The attached information is available concerning costs for October production. REQUIRED: (1) Using the attached forms, prepare a Cost of Production Report for Hake Plastics for the month of October, assuming a FIFO cost flow. Convert the gallons of liquid into bottles for calculating both physical units and equivalent units. Round costs per equivalent unit to five decimal places and all other dollar amounts to the nearest whole dollar. (2) Compute the amount of over- or underapplied manufacturing overhead for the month of October and prepare the journal entry required to dispose of it assuming the company considers the amount insignificant (not material). (3) Prepare the journal entry(ies) required by the company to record the transfer of costs to Finished Goods Inventory for the month of October. HAKE PLASTICS INFORMATION FOR COSTS RELATED TO PROCESS COSTING PRODUCTION FOR MONTH OF OCTOBER Hake Plastics manufactures two liter plastic bottles for the soda industry. The bottles are made in a one step process in which a petroleum based liquid is added at the beginning of the manufacturing process, and other chemicals needed to turn the liquid into a plastic bottle are added evenly throughout the remainder of the process. It requires one quart of the liquid plastic to manufacture one plastic bottle. Half the direct labor used in the process is added at the 30% point in the process where mixing is performed, and the remainder of the direct labor is added at the end of the process when the plastic is molded into its bottle shape by a molding machine operated by a worker. Manufacturing overhead is added evenly throughout the process at a rate of 125% of total direct material cost incurred. The finished plastic bottles are inspected at the end of the process after all costs have been added. All bottles that do not meet specifications are sold as scrap to a local recycler for $0.02 per bottle. The company expects that 1% of the total units in production during a given month will normally end up as scrap and the costs related to these spoiled units is attached to the good units that are transferred to finished goods. At the end of September, 1,000 gallons of liquid were still in process and were at the 60% stage of completion based on estimates of the production supervisors. During the month of October, 60,000 gallons of liquid were started in process. By the end of the month, 56,000 gallons had been turned into plastic bottles, 3,000 gallons of liquid were still in process, 20% complete. The attached information is available concerning costs for October production. REQUIRED: (1) Using the attached forms, prepare a Cost of Production Report for Hake Plastics for the month of October, assuming a FIFO cost flow. Convert the gallons of liquid into bottles for calculating both physical units and equivalent units. Round costs per equivalent unit to five decimal places and all other dollar amounts to the nearest whole dollar. (2) Compute the amount of over- or underapplied manufacturing overhead for the month of October and prepare the journal entry required to dispose of it assuming the company considers the amount insignificant (not material). (3) Prepare the journal entry(ies) required by the company to record the transfer of costs to Finished Goods Inventory for the month of October. HAKE PLASTICS INFORMATION FOR COSTS RELATED TO PROCESS COSTING PRODUCTION FOR MONTH OF OCTOBER