Mastery Problem: Process Cost Systems Grainy Goodness Company Grainy Goodness Company manufactures granola cereal by a series of three processes, beginning materials such as oats, sweeteners, and nuts being introduced in the Mixing Department. From the Mixing Department, the materials pass through the Baking and Packaging departments, emerging as boxed granola cereal ready for shipment to retail outlets. Direct materials are added at the beginning of each process, and conversion costs are incurred evenly throughout production in each department. During March, the President and sole stockholder, Jonathan Groat, reviewed the Cost of Production Report for the Mixing Department. He is concerned that the Mixing Department may not be operating efficiently, and asks for your help. Cost of Production Jonathan has noticed that his production manager has omitted some of the data on the Cost of Production. Determine the missing information. If there is no amount or an amount is zero, enter "0". Round your per-unit computations to the nearest cent, if required. Grainy Goodness Company Cost of Production Report-Mixing Department For the Month Ended March 31 Unit Information Units charged to production: Inventory in process, March 1 2,000 Received from materials storeroom 38,000 Total units accounted for by the Mixing Department 40,000 Units to be assigned costs:     Equivalent Units   WholeUnits DirectMaterials Conversion Inventory in process, March 1 (40% completed) 2,000     Started and completed in March 35,000 35,000 35,000 Transferred to Baking Department in March 37,000     Inventory in process, March 31 (90% completed) 3,000     Total units to be assigned costs 40,000     Cost Information Cost per equivalent unit:   DirectMaterials Conversion Total costs for March in Mixing Department $40,660 $36,955 Total equivalent units ÷ ÷ Cost per equivalent unit $ $ Costs assigned to production:   DirectMaterials Conversion Total Inventory in process, March 1 $2,200 $600 $2,800 Costs incurred in March     77,615 Total costs accounted for by the Mixing Department     $80,415 Cost allocated to completed and partially completed units:       Inventory in process, March 1-balance     $2,800 To complete inventory in process, March 1   1,140 1,140 Cost of completed March 1 work in process     $3,940 Started and completed in March 37,450 33,250 70,700 Transferred to Baking Department in March     $ Inventory in process, March 31 3,210 2,565   Total costs assigned by the Mixing Department     $           Feedback   February Cost Analysis Determine the cost per unit of direct materials and for conversion for the month of February using the completed data on the Cost of Production. Round your per-unit computations to the nearest cent, if required. Cost Analysis for February - Mixing Department   Amount Equivalent Units Cost per Unit Direct Materials in inventory in process, March 1 $   $ Conversion costs in inventory in process, March 1           Total cost per unit $   Feedback   March Cost Analysis Determine the cost per unit of direct materials and for conversion for the month of March using the completed data on the Cost of Production. Round your per-unit computations to the nearest cent, if required. Cost Analysis for March- Mixing Department   Amount Equivalent Units Cost per Unit Costs for March: Direct Materials $   $ Costs for March: Conversion           Total cost per unit $   Feedback   Mixing Dept. Evaluation After reviewing your work on the February Cost Analysis and March Cost Analysis, assist Jonathan Groat in evaluating the Mixing Department’s performance by answering the following questions: In March, was the Mixing Department’s total cost per unit higher or lower than in February? Higher  For which component was the cost per unit for March higher than in February? Conversion costs  What is most probably your recommendation to Jonathan Groat given your computations? Investigate a detailed breakdown of conversion costs to determine the source of the higher per-unit cost.    Feedback   Journal On March 31, using the data provided on the Cost of Production, journalize the entry to move the appropriate amount of cost from the Mixing Department to the Baking Department. If an amount box does not require an entry, leave it blank. Mar. 31 Work in Process-Baking        Work in Process-Mixing

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Mastery Problem: Process Cost Systems

Grainy Goodness Company

Grainy Goodness Company manufactures granola cereal by a series of three processes, beginning materials such as oats, sweeteners, and nuts being introduced in the Mixing Department. From the Mixing Department, the materials pass through the Baking and Packaging departments, emerging as boxed granola cereal ready for shipment to retail outlets. Direct materials are added at the beginning of each process, and conversion costs are incurred evenly throughout production in each department.

During March, the President and sole stockholder, Jonathan Groat, reviewed the Cost of Production Report for the Mixing Department. He is concerned that the Mixing Department may not be operating efficiently, and asks for your help.

Cost of Production

Jonathan has noticed that his production manager has omitted some of the data on the Cost of Production. Determine the missing information. If there is no amount or an amount is zero, enter "0". Round your per-unit computations to the nearest cent, if required.

Grainy Goodness Company
Cost of Production Report-Mixing Department
For the Month Ended March 31
Unit Information
Units charged to production:
Inventory in process, March 1 2,000
Received from materials storeroom 38,000
Total units accounted for by the Mixing Department 40,000
Units to be assigned costs:
    Equivalent Units
  Whole
Units
Direct
Materials

Conversion
Inventory in process, March 1 (40% completed) 2,000    
Started and completed in March 35,000 35,000 35,000
Transferred to Baking Department in March 37,000    
Inventory in process, March 31 (90% completed) 3,000    
Total units to be assigned costs 40,000    
Cost Information
Cost per equivalent unit:
  Direct
Materials

Conversion
Total costs for March in Mixing Department $40,660 $36,955
Total equivalent units ÷ ÷
Cost per equivalent unit $ $
Costs assigned to production:
  Direct
Materials

Conversion

Total
Inventory in process, March 1 $2,200 $600 $2,800
Costs incurred in March     77,615
Total costs accounted for by the Mixing Department     $80,415
Cost allocated to completed and partially completed units:      
Inventory in process, March 1-balance     $2,800
To complete inventory in process, March 1   1,140 1,140
Cost of completed March 1 work in process     $3,940
Started and completed in March 37,450 33,250 70,700
Transferred to Baking Department in March     $
Inventory in process, March 31 3,210 2,565  
Total costs assigned by the Mixing Department     $
       
 
Feedback
 

February Cost Analysis

Determine the cost per unit of direct materials and for conversion for the month of February using the completed data on the Cost of Production. Round your per-unit computations to the nearest cent, if required.

Cost Analysis for February - Mixing Department
  Amount Equivalent Units Cost per Unit
Direct Materials in inventory in process, March 1 $   $
Conversion costs in inventory in process, March 1      
    Total cost per unit $
 
Feedback
 

March Cost Analysis

Determine the cost per unit of direct materials and for conversion for the month of March using the completed data on the Cost of Production. Round your per-unit computations to the nearest cent, if required.

Cost Analysis for March- Mixing Department
  Amount Equivalent Units Cost per Unit
Costs for March: Direct Materials $   $
Costs for March: Conversion      
    Total cost per unit $
 
Feedback
 

Mixing Dept. Evaluation

After reviewing your work on the February Cost Analysis and March Cost Analysis, assist Jonathan Groat in evaluating the Mixing Department’s performance by answering the following questions:

In March, was the Mixing Department’s total cost per unit higher or lower than in February?

Higher 

For which component was the cost per unit for March higher than in February?

Conversion costs 

What is most probably your recommendation to Jonathan Groat given your computations?

Investigate a detailed breakdown of conversion costs to determine the source of the higher per-unit cost. 

 
Feedback
 

Journal

On March 31, using the data provided on the Cost of Production, journalize the entry to move the appropriate amount of cost from the Mixing Department to the Baking Department. If an amount box does not require an entry, leave it blank.

Mar. 31 Work in Process-Baking     
  Work in Process-Mixing     
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