Reference no: EM131807291
White Diamond Flour Company manufactures flour by a series of three processes, beginning with wheat grain being introduced in the Milling Department. From the Milling Department, the materials pass through the Sifting and Packaging departments, emerging as packaged refined flour. The balance in the account Work in Process-Sifting Department was as follows on July 1, 2016:
Work in Process-Sifting Department
| Work in Process-Sifting Department |
| (800 units, completed): |
| Direct materials (800 × $2.15) |
$1,720 |
| Conversion (800 × × $0.40) |
192 |
| $1,912 |
The following costs were charged to Work in Process-Sifting Department during July:
Direct materials transferred from Milling Department:
| 16,700 units at $2.25 a unit |
$37,575 |
| Direct labor |
4,540 |
| Factory overhead |
3,020 |
During July, 16,400 units of flour were completed. Work in Process-Sifting Department on July 31 was 1,100 units, completed.
Required:
1. Prepare a cost of production report for the Sifting Department for July.
2. Journalize the entries for costs transferred from Milling to Sifting and the costs transferred from Sifting to Packaging. Refer to the Chart of Accounts for correct wording of account titles.
3. Determine the increase or decrease in the cost per equivalent unit The rate used to allocate costs between completed and partially completed production. from June to July for direct materials and conversion costs.
4. Discuss the uses of the cost of production report and the results of part (3).