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 Reportfor 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	fill in the blank 03642cfcc07dfa7_1	fill in the blank 03642cfcc07dfa7_2
Started and completed in March	35,000	35,000	35,000
Transferred to Baking Department in March	37,000	fill in the blank 03642cfcc07dfa7_3	fill in the blank 03642cfcc07dfa7_4
Inventory in process, March 31 (80% completed)	3,000	fill in the blank 03642cfcc07dfa7_5	fill in the blank 03642cfcc07dfa7_6
Total units to be assigned costs	40,000	fill in the blank 03642cfcc07dfa7_7	fill in the blank 03642cfcc07dfa7_8
Cost Information
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 03642cfcc07dfa7_9	fill in the blank 03642cfcc07dfa7_10
Cost per equivalent unit		$fill in the blank 03642cfcc07dfa7_11	$fill in the blank 03642cfcc07dfa7_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 03642cfcc07dfa7_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 03642cfcc07dfa7_14
Inventory in process, March 31	3,210	2,280	fill in the blank 03642cfcc07dfa7_15
Total costs assigned by the Mixing Department			$fill in the blank 03642cfcc07dfa7_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 05892efdffaeffb_1	fill in the blank 05892efdffaeffb_2	$fill in the blank 05892efdffaeffb_3
Conversion costs in inventory in process, March 1	fill in the blank 05892efdffaeffb_4	fill in the blank 05892efdffaeffb_5	fill in the blank 05892efdffaeffb_6
		Total cost per unit	$fill in the blank 05892efdffaeffb_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 c9fb66fb607901e_1	fill in the blank c9fb66fb607901e_2	$fill in the blank c9fb66fb607901e_3
Costs for March: Conversion	fill in the blank c9fb66fb607901e_4	fill in the blank c9fb66fb607901e_5	fill in the blank c9fb66fb607901e_6
		Total cost per unit	$fill in the blank c9fb66fb607901e_7

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?

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

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

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		fill in the blank 171883f78f84021_2	fill in the blank 171883f78f84021_3
		fill in the blank 171883f78f84021_5	fill in the blank 171883f78f84021_6