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. Required: 1. Jonathan has noticed that his production manager has omitted some of the data on the Cost of Production panel. Determine the missing information. If there is no amount or an amount is zero, enter "0".* 2. On the February Cost Analysis panel, 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 panel.* 3. On the March Cost Analysis panel, 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 panel.* 4. After reviewing your work on the February Cost Analysis and March Cost Analysis panels, assist Jonathan Groat in evaluating the Mixing Department's performance by answering the questions on the Mixing Dept. Evaluation panel. 5. On March 31, using the data provided on the panels, journalize the entry to move the appropriate amount of cost from the Mixing Department to the Baking Department. Refer to the Chart of Accounts for exact wording of account titles. * Round your per-unit computations to the nearest cent, if required. ASSETS REVENUE 110 Cash 410 Sales 112 Accounts Receivable 610 Interest Revenue 125 Notes Receivable 126 Interest Receivable EXPENSES 131 Materials 510 Cost of Goods Sold 141 Work in Process-Mixing 520 Wages Expense 529 Selling Expenses 531 Utilities Expense 142 Work in Process-Baking 143 Work in Process-Packaging 151 Factory Overhead-Mixing 152 Factory Overhead-Baking 153 Factory Overhead-Packaging 532 Depreciation Expense-Factory 533 Insurance Expense 534 Office Supplies Expense 161 Finished Goods 540 Administrative Expenses 171 Office Supplies 590 Miscellaneous Expense 172 Prepaid Insurance 710 Interest Expense 173 Prepaid Expenses 181 Land 191 Factory 192 Accumulated Depreciation-Factory LIABILITIES 210 Accounts Payable 215 Notes Payable 221 Utilities Payable 236 Interest Payable 251 Wages Payable EQUITY 310 Common Stock 311 Retained Earnings 312 Dividends 313 Income Summary GRAINY GOODNESS COMPANY Cost of Production Report-Mixing Department For the Month Ended March 31 Equivalent Units UNITS Whole Units Direct Materials Conversion 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: 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 (80% completed) 3,000 Total units to be assigned costs 40,000 Costs COSTS Direct Materials Conversion Total Costs per equivalent unit: Total costs for March in Mixing Department $40,660 $38,600 Total equivalent units Cost per equivalent unit $ $ Costs assigned to production: Inventory in process, March 1 $2,200 $600 $2,800 Costs incurred in March 79,260 Total costs accounted for by the Mixing Department $82,060 Cost allocated to completed and partially completed units: Inventory in process, March 1-balance $2,800 To complete inventory in process, March 1 $0.00 $1,200 1,200 Cost of completed March 1 work in process $4,000 Started and completed in March $37,450 $35,000 72,450 Transferred to Baking Department in March $ Inventory in process, March 31 $3,210 $2,400 Total costs assigned by the Mixing Department $ 5. On March 31, using the data provided on the panels, journalize the entry to move the appropriate amount of cost from the Mixing Department to the Baking Department. Refer to the Chart of Accounts for exact wording of account titles. PAGE 15 JOURNAL ACCOUNTING EQUATION DATE DESCRIPTION POST. REF. DEBIT CREDIT ASSETS LIABILITIES EQUITY 1 2 3. 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 panel. 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 $ 4. After reviewing your work on the February Cost Analysis and March Cost Analysis panels, 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? Lower O Higher O No difference For which component(s) was the cost per unit for March higher than in February? Check all that apply. O Direct material costs Both were higher for March O Conversion costs What is most probably your recommendation to Jonathan Groat given your computations? O Investigate a detailed breakdown conversion costs to determine the source of the higher per-unit cost. O Pay higher commissions to salespeople to spur sales. Look into creating higher incentives for administrative staff in order to create more effective reporting procedures. Investigate a detailed breakdown direct materials cost to determine the source of the higher per-unit cost. 2. 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 panel. Round your per-unit computations to the nearest cent, if required. Cost per Unit Cost Analysis for February - Mixing Department Amount Equivalent Units Direct Materials in inventory in process, March 1 $ Conversion costs in inventory in process, March 1 $ Total cost per unit $