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 $2.25)	$2,250
Conversion (1,000 3/5 $0.40)	240
	$2,490

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
Direct labor	4,420
Factory overhead	2,546

During July, 14,800 units of flour were completed. Work in Process-Sifting Department on July 31 was 1,600 units, 4/5 completed.

Required:

1.

Prepare a cost of production report for the Sifting Department for July. If an amount is zero, enter "0". 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).

1. Prepare a cost of production report for the Sifting Department for July. If an amount is zero, enter "0". Round your cost per unit answers to the nearest cent and final answers to the nearest dollar amount.

WHITE DIAMOND FLOUR COMPANY

Cost of Production Report-Sifting Department

For the Month Ended July 31

UNITS

Whole Units

Equivalent 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)

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 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
Started and completed in July
Transferred to Packaging Department in July
Inventory in process, July 31
Total costs assigned by the Sifting Department