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-Sitting Department (850 units, completed) Direct materials (850 Conversion (850 * $2.15) $1,828 $0.50) 255 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 4540 Factory overhead 4029 During July, 15.050 units of flour were completed. Work in Process-Sifting Department on July 31 was 1,300 units completed. During July 15,050 units of flour were completed. Work in Process-Sifting Department on July 31 was 1.300 units completed. Required: 1. Prepare a cost of production report for the Sitting 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. 1. Determine the increase or decrease in the cost per se n t from June to july for direct materials and conversion costs 4. Discuss the unes of the cost of production report and the results of part (3) Chart of Accounts CHART OF ACCOUNTS White Diamond Flour Company General Ledger ASSETS REVENUE 410 Sales 610 Interest Revenue 110 Cash 121 Accounts Receivable 125 Notes Receivable 126 Interest Receivable EXPENSES 510 Cost of Goods Sold EXPENSES 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-Sitting 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 510 Cost of Goods Sold 520 Wages Expense 531 Selling Expenses 532 Insurance Expense 533 Utilities Expense 534 Supplies Expense 540 Administrative Expenses 561 Depreciation Expense-Factory 590 Miscellaneous Expense 710 Interest Expense LIABILITIES 210 Accounts Payable 221 Utilities Payable 231 Notes Payable 236 Interest Payable 25+ Warse la 1. Prepare a cost of production report for the Sitting Department for July WHITE DIAMOND FLOUR COMPANY Cost of Production Report-Sifting Department For the Month Ended July 31, 2016 Equivalent Units UNITS Whole Units Direct Materials Conversion Units charged to production: Inventory in process, July 1 Received from Miling Department Total units accounted for by the Sitting Department Units to be assigned costs Inventory in process, July 1 completed) Started and completed in July Transferred to Packaging Department in July Inventory in process, July 31 completed) Total units to be assigned costs COSTS Costs Direct Materials Conversion Total Costs 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 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 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 Sitting Department Journal 2. Journalize the entries for costs transferred from Milling to sifting and the costs transferred from Sitting to Packaging. Refer to the Chart of Accounts for comer wording of account titles. PAGE 10 JOURNAL DATE DESCRIPTION POST. REF DEBIT CREDIT JOURNAL DATE POST. REF. DEBIT CREDIT Final Questions 3. Determine the increase or decrease in the cost per equivalent unit from une to y for direct materials and conversion costs Direct materials Conversion: 4. The cost of production report may be used as the basis for allocating product costs between 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