2. Below is a cost sheet for H&L Co. a rug manufacturing company. You are the manager and have received the cost of production sheet from the accounting office and need to make some decisions based on the information provided. A. Using the examples, you worked on in chapter 3, dissect the cost of production sheet and translate it into story form. Based on your records last period the equivalent units of production for direct materials was $16.25 and conversion was $11.32. a. Identify if the change in EUP was an increase or decrease and what amount for each. b. What are some contributing factors to the changes? c. Are these changes good or bad? d. What kind of effects will the fluctuation of the cost of EUP have on the decisions you will be making for the next period? B. Prepare the journal entries to show the purchase of materials, the conversion costs (assuming the direct labor was $125,000) and the transfer to work in process and finished goods. C. Prepare a Work in Process T-account. H&L Co. Cost of Production Report - Department FIFO Equivalent Units of Production WHOLE UNITS DIRECT MATERIALS CONVERSION UNITS Units Charged to production Beginning WIP Inventory in Process, July 1 Received from Milling Department Total Units accounted for by Sifiting Department 950.00 15,620.00 16,570.00 EUP Direct Materials Units to be assigned costs: Beginning WIP, Started and Completed (Transferred to packaging - Beg WI Transferred to Packaging Department Ending WIP Total Units to be assigned costs (Must equal total units accounted for by sifting department) 950.00 14,780.00 15,730.00 840.00 16,570.00 14,780.00 14,780.00 840.00 15,620.00 Conversion 475.00 14,780.00 15,255.00 504.00 15,759.00 COSTS Conversion Direct Materials COSTS Cost per equivalent Unit Total costs for July Sifting Department Total Equivelant Units from step 2 Cost per equivalent Unit 230,000.00 15,620.00 14.72 125,000.00 15,759.00 7.93 Costs Assigned to production Cost of Beginning WIP Cost incurred in period (DM + DL + FOH) Total costs to account for 28,470.00 355,000.00 383,470.00 28,470.00 28,470.00 Costs allocated to completed and partially completed units Beginning WIP To complete Beginning WIP Cost to complete July WIP Cost of started and completed in period Transferred to packaging department Ending Inventory WIP Total Costs assigned 28,470.00 28,470.00 2. Below is a cost sheet for H&L Co. a rug manufacturing company. You are the manager and have received the cost of production sheet from the accounting office and need to make some decisions based on the information provided. A. Using the examples, you worked on in chapter 3, dissect the cost of production sheet and translate it into story form. Based on your records last period the equivalent units of production for direct materials was $16.25 and conversion was $11.32. a. Identify if the change in EUP was an increase or decrease and what amount for each. b. What are some contributing factors to the changes? c. Are these changes good or bad? d. What kind of effects will the fluctuation of the cost of EUP have on the decisions you will be making for the next period? B. Prepare the journal entries to show the purchase of materials, the conversion costs (assuming the direct labor was $125,000) and the transfer to work in process and finished goods. C. Prepare a Work in Process T-account. H&L Co. Cost of Production Report - Department FIFO Equivalent Units of Production WHOLE UNITS DIRECT MATERIALS CONVERSION UNITS Units Charged to production Beginning WIP Inventory in Process, July 1 Received from Milling Department Total Units accounted for by Sifiting Department 950.00 15,620.00 16,570.00 EUP Direct Materials Units to be assigned costs: Beginning WIP, Started and Completed (Transferred to packaging - Beg WI Transferred to Packaging Department Ending WIP Total Units to be assigned costs (Must equal total units accounted for by sifting department) 950.00 14,780.00 15,730.00 840.00 16,570.00 14,780.00 14,780.00 840.00 15,620.00 Conversion 475.00 14,780.00 15,255.00 504.00 15,759.00 COSTS Conversion Direct Materials COSTS Cost per equivalent Unit Total costs for July Sifting Department Total Equivelant Units from step 2 Cost per equivalent Unit 230,000.00 15,620.00 14.72 125,000.00 15,759.00 7.93 Costs Assigned to production Cost of Beginning WIP Cost incurred in period (DM + DL + FOH) Total costs to account for 28,470.00 355,000.00 383,470.00 28,470.00 28,470.00 Costs allocated to completed and partially completed units Beginning WIP To complete Beginning WIP Cost to complete July WIP Cost of started and completed in period Transferred to packaging department Ending Inventory WIP Total Costs assigned 28,470.00 28,470.00