Question

In: Accounting

make sure to do all parts I'll rate Grainy Goodness Company manufactures granola cereal by a...

make sure to do all parts I'll rate

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.

Chart of Accounts

CHART OF ACCOUNTS
Grainy Goodness Company
General Ledger
ASSETS
110 Cash
112 Accounts Receivable
125 Notes Receivable
126 Interest Receivable
131 Materials
141 Work in Process-Mixing
142 Work in Process-Baking
143 Work in Process-Packaging
151 Factory Overhead-Mixing
152 Factory Overhead-Baking
153 Factory Overhead-Packaging
161 Finished Goods
171 Office Supplies
172 Prepaid Insurance
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
REVENUE
410 Sales
610 Interest Revenue
EXPENSES
510 Cost of Goods Sold
520 Wages Expense
529 Selling Expenses
531 Utilities Expense
532 Depreciation Expense-Factory
533 Insurance Expense
534 Office Supplies Expense
540 Administrative Expenses
590 Miscellaneous Expense
710 Interest Expense

Cost of Production

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". 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 Whole Units Equivalent 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
Cost per equivalent unit:
Total costs for March in Mixing Department $41,420 $38,600
Total equivalent units ÷ ÷
Cost per equivalent unit
Costs assigned to production:
Inventory in process, March 1 $2,300 $640 $2,940
Costs incurred in March 80,020
Total costs accounted for by the Mixing Department $82,960
Cost allocated to completed and
partially completed units:
Inventory in process, March 1 balance $2,940
To complete inventory in process, March 1 $0.00 $1,200 1,200
Cost of completed March 1 work in process $4,140
Started and completed in March $38,150 $35,000 73,150
Transferred to Baking Department in March
Inventory in process, March 31 $3,270 $2,400
Total costs assigned by the Mixing Department

February Cost Analysis

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 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

March Cost Analysis

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

Mixing Dept. Evaluation

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?

No difference

Lower

Higher

For which component(s) was the cost per unit for March higher than in February? Check all that apply.

Conversion costs

Both were higher for March

Direct material 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.

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 direct materials cost to determine the source of the higher per-unit cost.

Journal

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

Solutions

Expert Solution

Cost of Production Report-Mixing Department
For the Month Ended March 31
UNITS Whole Units Equivalent Units
Direct Materials Conversion
Units charged to production:
Inventory in process, March 1 2,000 2,000 2,000
Received from materials storeroom 38,000 38,000 38,000
Total units accounted for by the Mixing Department 40,000 40,000 40,000
Units to be assigned costs:
Inventory in process, March 1 (40% completed) 2,000 0 1200 (2000*60%)
Started and completed in March 35,000 35,000 35,000
Transferred to Baking Department in March 37,000 35000 36200
Inventory in process, March 31 (80% completed) 3,000 3000 2400 (3000*80%)
Total units to be assigned costs 40,000 38000 38600
COSTS Costs
Direct Materials Conversion Total
Cost per equivalent unit:
Total costs for March in Mixing Department $41,420 $38,600 $80,020
Total equivalent units 38000 38600
Cost per equivalent unit $1.09 $1.00 $2.09
Costs assigned to production:
Inventory in process, March 1 $2,300 $640 $2,940
Costs incurred in March $41,420 $38,600 80,020
(38150+3270) (80020-41420)
Total costs accounted for by the Mixing Department $43,720 $39,240 $82,960
Cost allocated to completed and
partially completed units:
Inventory in process, March 1 balance $2,940
To complete inventory in process, March 1 $0.00 $1,200 1,200
Cost of completed March 1 work in process $4,140
Started and completed in March $38,150 $35,000 73,150
Transferred to Baking Department in March $38,150.00 $36,200.00 $77,290
Inventory in process, March 31 $3,270 $2,400 $5,670
Total costs assigned by the Mixing Department $41,420.00 $38,600.00 $82,960
ANS 2
Cost Analysis for February - Mixing Department
Amount Equivalent Units Cost per Unit
Direct Materials in inventory in process, March 1 $2,300 2000 $1.15
Conversion costs in inventory in process, March 1 $640 800 $0.80
(2000*40%) $1.95
ANS 3
Cost Analysis for March- Mixing Department
Amount Equivalent Units Cost per Unit
Costs for March: Direct Materials $41,420 38000 $1.09
Costs for March: Conversion $38,600 38600 $1.00
Total cost per unit $2.09
ANS 4
Total cost was higher in March
Conversion cost was higher in March
Investigate a detailed breakdown of conversion costs to determine the source of the higher per-unit cost.
Ans 5 Dr Cr
Work In process-baking Department $77,290
Work In process-Mixing Department $77,290

Related Solutions

Grainy Goodness Company Grainy Goodness Company manufactures granola cereal by a series of three processes, beginning...
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...
Grainy Goodness Company Grainy Goodness Company manufactures granola cereal by a series of three processes, beginning...
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...
Mastery Problem: Process Cost Systems Grainy Goodness Company Grainy Goodness Company manufactures granola cereal by a...
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...
Mastery Problem: Process Cost Systems Grainy Goodness Company Grainy Goodness Company manufactures granola cereal by a...
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...
Mastery Problem: Process Cost Systems Grainy Goodness Company Grainy Goodness Company manufactures granola cereal by a...
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...
Mastery Problem: Process Cost Systems Grainy Goodness Company Grainy Goodness Company manufactures granola cereal by a...
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...
Mastery Problem: Process Cost Systems Grainy Goodness Company Grainy Goodness Company manufactures granola cereal by a...
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...
Mastery Problem: Process Cost Systems Grainy Goodness Company Grainy Goodness Company manufactures granola cereal by a...
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...
Mastery Problem: Process Cost Systems Grainy Goodness Company Grainy Goodness Company manufactures granola cereal by a...
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...
Grainy Goodness Company manufactures granola cereal by a series of three processes, beginning materials such as...
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,...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT