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.

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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

Units charged to production:		Number of Units
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	fill in the blank f0ed5e05a046fe1_1	fill in the blank f0ed5e05a046fe1_2
Started and completed in March	35,000	35,000	35,000
Transferred to Baking Department in March	37,000	fill in the blank f0ed5e05a046fe1_3	fill in the blank f0ed5e05a046fe1_4
Inventory in process, March 31 (80% completed)	3,000	fill in the blank f0ed5e05a046fe1_5	fill in the blank f0ed5e05a046fe1_6
Total units to be assigned costs	40,000	fill in the blank f0ed5e05a046fe1_7	fill in the blank f0ed5e05a046fe1_8

Cost per equivalent unit:	Direct Materials	Conversion
Total costs for March in Mixing Department	$40,660	$36,670
Total equivalent units	fill in the blank f0ed5e05a046fe1_9	fill in the blank f0ed5e05a046fe1_10
Cost per equivalent unit	$fill in the blank f0ed5e05a046fe1_11	$fill in the blank f0ed5e05a046fe1_12
Costs assigned to production:
	Direct Materials	Conversion	Total
Inventory in process, March 1	$2,200	$600	$2,800
Costs incurred in March			77,330
Total costs accounted for by the Mixing Department			$80,130
Cost allocated to completed and partially completed units:
Inventory in process, March 1-balance			$2,800
To complete inventory in process, March 1	fill in the blank f0ed5e05a046fe1_13	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			$fill in the blank f0ed5e05a046fe1_14
Inventory in process, March 31	3,210	2,280	fill in the blank f0ed5e05a046fe1_15
Total costs assigned by the Mixing Department			$fill in the blank f0ed5e05a046fe1_16

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Feedback

Review the format and the steps to complete the Cost of Production Report.

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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 e40c85f6dfeef9c_1	fill in the blank e40c85f6dfeef9c_2	$fill in the blank e40c85f6dfeef9c_3
Conversion costs in inventory in process, March 1	fill in the blank e40c85f6dfeef9c_4	fill in the blank e40c85f6dfeef9c_5	fill in the blank e40c85f6dfeef9c_6
		Total cost per unit	$fill in the blank e40c85f6dfeef9c_7

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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 f749b8facf8104e_1	fill in the blank f749b8facf8104e_2	$fill in the blank f749b8facf8104e_3
Costs for March: Conversion	fill in the blank f749b8facf8104e_4	fill in the blank f749b8facf8104e_5	fill in the blank f749b8facf8104e_6
		Total cost per unit	$fill in the blank f749b8facf8104e_7

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Mixing Dept. Evaluation

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

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

HigherLowerNo differenceHigher

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

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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