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14. White Diamond Flour Company manufactures flour by a series of three processes, beginning with wheat grain being introduced in the Milling Department. From the

14. 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:

Work in Process-Sifting Department (850 units, 3/5 completed):
Direct materials (850 $2.15) $1,828
Conversion (850 3/5 $0.50) 255
$2,083

The following costs were charged to Work in Process-Sifting Department during July:

Direct materials transferred from Milling Department:
15,500 units at $2.25 a unit $34,875
Direct labor 4,540
Factory overhead 4,029

During July, 15,050 units of flour were completed. Work in Process-Sifting Department on July 31 was 1,300 units, 4545 completed.

Required:
1. Prepare a cost of production report for the Sifting Department for July. If required, round your cost per equivalent unit answers to two decimal places. If an amount is zero, enter zero 0.
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 from June to July for direct materials and conversion costs. If required, round your answers to two decimal places.
4. Discuss the uses of the cost of production report and the results of part (3).

CHART OF ACCOUNTS
White Diamond Flour Company
General Ledger
ASSETS
110 Cash
121 Accounts Receivable
125 Notes Receivable
126 Interest Receivable
131 Materials
141 Work in Process-Milling Department
142 Work in Process-Sifting Department
143 Work in Process-Packaging Department
151 Factory Overhead-Milling Department
152 Factory Overhead-Sifting Department
153 Factory Overhead-Packaging Department
161 Finished Goods
171 Supplies
172 Prepaid Insurance
173 Prepaid Expenses
181 Land
191 Factory
192 Accumulated Depreciation-Factory
LIABILITIES
210 Accounts Payable
221 Utilities Payable
231 Notes Payable
236 Interest Payable
251 Wages Payable
EQUITY
311 Common Stock
340 Retained Earnings
351 Dividends
REVENUE
410 Sales
610 Interest Revenue

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