Now that you have completed the production cost report, the controller would like you to do a few more tasks. Use the space at the left to document your responses. 1) Record the journal entry that needs to be made 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 = $0.60 The 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 per unit in dollars and cents, 3) During the month Henkel sold 160,000 of the units it produced during May at a sales price of $30 per unit. Operating expenses for the month totaled $505,000. The controller would like you to prepare a draft of the company's 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 company's ending WIP and FG inventory at May 31. The controller wants to know the following: a) How many units are in each Department's WIP? b) What is the cost balance for each Department's WIP? c) How many units are in Finished Goods Inventory? d) What is the total cost balance in Finished Goods Inventory? 5) Although the production manager said that the units in WIP at the end of May were 80% of the way through the process, the controller knows that figure is somewhat subjective. She has talked to the assistant production manager, who believes the units were only about 60% complete. She wants you to run your spreadsheet using 60% as the percent of completion to see what impact the estimate has on A) total cost per unit, and B) the company's income statement for the month. 1f 60% is used as the percentage of completion, would operating income be higher or lower, and by how much? How could managers inflate earnings? IMPORTANT: BEFORE doing this analysis, copy your May production cost report worksheet to a new tab and rename it "What-if 60%?" To do this, right click on the May tab at the bottom of the screen and choose "move or copy" then check the box, "make a copy". Then right click on the new copied spreadsheet and choose "rename". Finally, check the Grading Rubric worksheet to make sure you have completed all requirements. Then save your file and submit it in Blackboard. 1) Journal entry needed 2) Total cost per unit: Blending DM Blending CC Forming DM Forming CC Total cost per unit 3) Check figure $ 10.45 Henkel Industries Income Statement For the Month Ending May 31 Per unit Total Sales Revenue Operating expenses Operating income Units Cost 4) Inventory Analysis WIP-Blending WIP-Forming Finished Goods 5A) Total cost per unit Blending DM Blending CC Forming DM Forming CC Total cost per unit