Cost of Production Report

The debits to Work in ProcessRoasting Department for Morning Brew Coffee Company for August, together with information concerning production, are as follows:

Work in process, August 1, 800 pounds, 20% completed			$3,712*
	*Direct materials (800 X $4.30)	$3,440
	Conversion (800 X 20% X $1.70)	272
	$3,712
Coffee beans added during August, 25,000 pounds			106,250
Conversion costs during August			44,514
Work in process, August 31, 1,300 pounds, 30% completed			?
Goods finished during August, 24,500 pounds			?

All direct materials are placed in process at the beginning of production.

a. Prepare a cost of production report, presenting the following computations:

1. Direct materials and conversion equivalent units of production for August
2. Direct materials and conversion costs per equivalent unit for August
3. Cost of goods finished during August
4. Cost of work in process at August 31

If an amount is zero, enter in "0". For the cost per equivalent unit, round your answer to two decimal places.

Morning Brew Coffee Company
Cost of Production Report-Roasting Department
For the Month Ended August 31
Unit Information
Units charged to production:
Inventory in process, August 1	fill in the blank 0d9b89011fa6052_1
Received from materials storeroom	fill in the blank 0d9b89011fa6052_2
Total units accounted for by the Roasting Department	fill in the blank 0d9b89011fa6052_3
Units to be assigned costs:
		Equivalent Units
	Whole Units	Direct Materials (1)	Conversion (1)
Inventory in process, August 1	fill in the blank 0d9b89011fa6052_4	fill in the blank 0d9b89011fa6052_5	fill in the blank 0d9b89011fa6052_6
Started and completed in August	fill in the blank 0d9b89011fa6052_7	fill in the blank 0d9b89011fa6052_8	fill in the blank 0d9b89011fa6052_9
Transferred to finished goods in August	fill in the blank 0d9b89011fa6052_10	fill in the blank 0d9b89011fa6052_11	fill in the blank 0d9b89011fa6052_12
Inventory in process, August 31	fill in the blank 0d9b89011fa6052_13	fill in the blank 0d9b89011fa6052_14	fill in the blank 0d9b89011fa6052_15
Total units to be assigned costs	fill in the blank 0d9b89011fa6052_16	fill in the blank 0d9b89011fa6052_17	fill in the blank 0d9b89011fa6052_18
Cost Information
Cost per equivalent unit:
	Direct Materials	Conversion
Total costs for August in Roasting Department	$fill in the blank 0d9b89011fa6052_19	$fill in the blank 0d9b89011fa6052_20
Total equivalent units	fill in the blank 0d9b89011fa6052_21	fill in the blank 0d9b89011fa6052_22
Cost per equivalent unit (2)	$fill in the blank 0d9b89011fa6052_23	$fill in the blank 0d9b89011fa6052_24
Costs assigned to production:
	Direct Materials	Conversion	Total
Inventory in process, August 1			$fill in the blank 0d9b89011fa6052_25
Costs incurred in August			fill in the blank 0d9b89011fa6052_26
Total costs accounted for by the Roasting Department			$fill in the blank 0d9b89011fa6052_27
Costs allocated to completed and partially completed units:
Inventory in process, August 1 balance			$fill in the blank 0d9b89011fa6052_28
To complete inventory in process, August 1	$fill in the blank 0d9b89011fa6052_29	$fill in the blank 0d9b89011fa6052_30	fill in the blank 0d9b89011fa6052_31
Cost of completed August 1 work in process			$fill in the blank 0d9b89011fa6052_32
Started and completed in August	fill in the blank 0d9b89011fa6052_33	fill in the blank 0d9b89011fa6052_34	fill in the blank 0d9b89011fa6052_35
Transferred to finished goods in August (3)			$fill in the blank 0d9b89011fa6052_36
Inventory in process, August 31 (4)	fill in the blank 0d9b89011fa6052_37	fill in the blank 0d9b89011fa6052_38	fill in the blank 0d9b89011fa6052_39
Total costs assigned by the Roasting Department			$fill in the blank 0d9b89011fa6052_40

b. Compute and evaluate the change in cost per equivalent unit for direct materials and conversion from the previous month (July). If required, round your answers to the nearest cent.

	Increase or Decrease	Amount
Change in direct materials cost per equivalent unit	IncreaseDecrease	$fill in the blank 04539002d06d07b_2
Change in conversion cost per equivalent unit	IncreaseDecrease	$fill in the blank 04539002d06d07b_4

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 (35% completed)	2,000	fill in the blank df14d2fbbfedfac_1	fill in the blank df14d2fbbfedfac_2
Started and completed in March	35,000	35,000	35,000
Transferred to Baking Department in March	37,000	fill in the blank df14d2fbbfedfac_3	fill in the blank df14d2fbbfedfac_4
Inventory in process, March 31 (80% completed)	3,000	fill in the blank df14d2fbbfedfac_5	fill in the blank df14d2fbbfedfac_6
Total units to be assigned costs	40,000	fill in the blank df14d2fbbfedfac_7	fill in the blank df14d2fbbfedfac_8
Cost Information
Cost per equivalent unit:
	Direct Materials	Conversion
Total costs for March in Mixing Department	$40,660	$36,765
Total equivalent units	fill in the blank df14d2fbbfedfac_9	fill in the blank df14d2fbbfedfac_10
Cost per equivalent unit	$fill in the blank df14d2fbbfedfac_11	$fill in the blank df14d2fbbfedfac_12
Costs assigned to production:
	Direct Materials	Conversion	Total
Inventory in process, March 1	$2,200	$525	$2,725
Costs incurred in March			77,425
Total costs accounted for by the Mixing Department			$80,150
Cost allocated to completed and partially completed units:
Inventory in process, March 1-balance			$2,725
To complete inventory in process, March 1	fill in the blank df14d2fbbfedfac_13	1,235	1,235
Cost of completed March 1 work in process			$3,960
Started and completed in March	37,450	33,250	70,700
Transferred to Baking Department in March			$fill in the blank df14d2fbbfedfac_14
Inventory in process, March 31	3,210	2,280	fill in the blank df14d2fbbfedfac_15
Total costs assigned by the Mixing Department			$fill in the blank df14d2fbbfedfac_16

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	$fill in the blank 93c45504707ffaf_1	fill in the blank 93c45504707ffaf_2	$fill in the blank 93c45504707ffaf_3
Conversion costs in inventory in process, March 1	fill in the blank 93c45504707ffaf_4	fill in the blank 93c45504707ffaf_5	fill in the blank 93c45504707ffaf_6
		Total cost per unit	$fill in the blank 93c45504707ffaf_7

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	$fill in the blank e80166f76065fc9_1	fill in the blank e80166f76065fc9_2	$fill in the blank e80166f76065fc9_3
Costs for March: Conversion	fill in the blank e80166f76065fc9_4	fill in the blank e80166f76065fc9_5	fill in the blank e80166f76065fc9_6
		Total cost per unit	$fill in the blank e80166f76065fc9_7

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?

HigherLowerNo difference

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

Conversion costsDirect material costsBoth were higher for MarchNeither were higher for March

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.Investigate a detailed breakdown of direct materials cost to determine the source of the higher per-unit cost.Look into creating higher incentives for administrative staff in order to create more effective reporting procedures.Pay higher commissions to salespeople to spur sales.

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	Factory Overhead-MixingFactory Overhead-BakingFactory Overhead-PackagingWork in Process-BakingWork in Process-MixingWork in Process-Baking	Work in Process-Baking	Work in Process-Baking
	Factory Overhead-MixingFactory Overhead-BakingFactory Overhead-PackagingWork in Process-BakingWork in Process-MixingWork in Process-Mixing	Work in Process-Mixing	Work in Process-Mixing