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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

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
(700 units, 3535 completed):
Direct materials (700 $2.35) $1,645
Conversion (700 3535 $0.30) 126
$1,771

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

Direct materials transferred from Milling Department:
15,700 units at $2.45 a unit $38,465
Direct labor 4,480
Factory overhead 1,022

During July, 15,100 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.
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.
4. Discuss the uses of the cost of production report and the results of part (3).

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