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 (600 units, 3/5 completed): Direct materials (600 $2.25) $1,350 Conversion (600 * 3/5 * $0.40) 144 $1,494 The following costs were charged to Work in Process-Sifting Department during July: Direct materials transferred from Milling Department: 15,400 units at $2.35 a unit $36,190 Instructions 15,400 units at $2.35 a unit $36,190 Direct labor 4,420 Factory overhead 2,474 During July, 14,400 units of flour were completed. Work in Process-Sifting Department on July 31 was 1,600 units, 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 O. 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 152 Factory Overhead-Sifting Department 534 Supplies Expense 153 Factory Overhead-Packaging Department 540 Administrative Expense 161 Finished Goods 561 Depreciation Expense-Factory 171 Supplies 590 Miscellaneous Expense 710 Interest Expense 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 Pavable. Chart of Accounts TUI I uucury 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 Chart of Accounts CHART OF ACCOUNTS White Diamond Flour Company General Ledger ASSETS REVENUE 110 Cash 410 Sales 121 Accounts Receivable 610 Interest Revenue 125 Notes Receivable 126 Interest Receivable 131 Materials 141 Work in Process-Milling Department EXPENSES 510 Cost of Goods Sold 520 Wages Expense 531 Selling Expense 532 Insurance Expense 142 Work in Process-Sifting Department 143 Work in Process-Packaging Department 151 Factory Overhead-Milling Department 152 Factory Overhead-Sifting Department 533 Utilities Expense 534 Supplies Expense 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 "O". WHITE DIAMOND FLOUR COMPANY Cost of Production Report-Sifting Department For the Month Ended July 31 Equivalent Units UNITS Whole Units Direct Materials Conversion Units charged to production: Inventory in process, July 1 Received from Milling Department Total units accounted for by the Sifting Department Units to be assigned costs: Inventory in process July 1/3/5 completed) Cost of Production Report Inventory in process, July 1 (3/5 completed) Started and completed in July Transferred to Packaging Department in July Inventory in process, July 31 (4/5 completed) Total units to be assigned costs Costs COSTS Direct Materials Conversion Total Cost per equivalent unit: Total costs for July in Sifting Department Total equivalent units Cost per equivalent unit Costs assianed to production: Cost of Production Report Costs assigned to production: Inventory in process, July 1 Costs incurred in July Total costs accounted for by the Sifting Department Cost 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 Started and completed in July Transferred to Packaging Department in July Inventory in process, July 31 Total costs assigned by the Sifting Department Journal 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 accoun PAGE 10 JOURNAL ACCOUNTING EQUATION DATE DESCRIPTION POST. REF. DEBIT CREDIT ASSETS LIABILITIES EQUITY Final Questions 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. Direct materials: $ Conversion: and 4. The cost of production report may be used as the basis for allocating product costs between . 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