Susan's Plastics, Inc

question 30

Essay

Susan's Plastics, Inc., manufactures a line of office desk accessories. The company's newest and most popular product is a plastic paper holder for holding the paper up while working at the computer. Production began on February 1, 20xx. Plastic is poured into molds to form the product, and the entire process takes place in the Molding Department. After the liquid plastic is poured (signifying the beginning of the process), the molds must be cooled slowly before the paper holder is separated from the mold. Statistics for 20xx are shown below.
Ending work in process inventory: All direct materials were added at the beginning of the process, and the average stage of completion of these units as to conversion costs is 80 percent.
No units were lost or spoiled during the year.
a.


a. Prepare a process cost report using the FIFO costing method for the Molding Department using five steps. Include T accounts to recap both costs and units for the Work in Process Inventory account.
b. Identify the amount to be transferred out of Work in Process Inventory and prepare the necessary entry in journal form to do so.
b. Transfer $_________ to __________ and prepare the necessary journal entry in good form to make the transfer.

Determine the impact of sales volume changes on net operating income.

Estimate the changes in net operating income as a result of pricing, cost, and advertising decisions.

Calculate and analyze the impact of changes in variable costs, fixed costs, and selling prices on a company's financial performance.

Determine the margin of safety and its importance in assessing financial risk.

---

Definitions:

Featherbedding

A labor practice where unions require employers to hire more workers than are necessary, typically to protect or create jobs.

Unneeded Workers

Employees or labor that are surplus to the requirements of a current production process or economic system.

Union Workers

Employees who are members of a labor union, an organization that represents workers in negotiations with employers over wages, benefits, and working conditions.

Disputes

Conflicts or disagreements that arise in economic transactions or between parties over resources, contracts, policies, or regulations, often requiring negotiation or legal intervention to resolve.