Instructions 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 (1,000 units, 3/5 completed): Direct materials (1,000 $2.15) $2,150 Conversion (1,000 315 $0.40) 240 $2,390 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 3,056 During July, 16,600 units of flour were completed. Work in Process-Sifting Department on July 31 was 1,100 units, 4/5 completed. Required: 1. Prepare a cost of production report for the Sifting Department for July. If an amount is zero, enter "O". Round your cost per unit answers to the nearest cent and final answers to the nearest dollar amount. 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. Use the date July 31 for all journal entries. 3. Determine the increase or decrease in the cost per equivalent unit from June to July for direct materials and conversion costs. Round your answers to the nearest cent. 4. Discuss the uses of the cost of production report and the results of part (3). Cost of Production Report Shaded cells have fee Costs COSTS Direct Materials Conversion Total Cost per equivalent unit: Total costs for July in Sifting Department $37,575 $3,984 X Total equivalent units Cost per equivalent unit Costs assigned to production: Inventory in process, July 1 Costs incurred in July Total costs accounted for by the Sifting Department Costs allocated to completed and partially completed units: Inventory in process, July 1-balance To complete inventory in process, July 1 Cost of completed July 1 work in process Journal Shaded cells have feedback. 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. Use the date July 31 for all journal entries. Question not attempted. PAGE 10 JOURNAL Score: 0/51 DATE DESCRIPTION POST. REF. DEBIT CREDIT Final Questions Shaded cells have feedback. 3. Determine the increase or decrease in the cost per equivalent unit from June to July for direct materials and conversion costs. Round your answers to the nearest cent. Direct materials: $ Increase Increase Conversion: Points: - 2/4 4. The cost of production report may be used as the basis for allocating product costs between Work in Process and Transferred-Out . The report can also be used to control costs by holding each department head responsible for the units entering production and the costs incurred in the department. Any differences in unit product costs from one month to another, such as those in part (3), can be studied carefully and any significant differences investigated. Points: 212
