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 $(1,000\backslash$times $$2\mathrm{.}25)$ $$2,250$

Conversion $(1,000\backslash$times $3/5\backslash$times $$0\mathrm{.}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 $$2\mathrm{.}35$ a unit $$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 the exact wording of the account titles. CNOW journals do not use lines for spaces or journal explanations. Every line on a journal page is used for debit or credit entries. Do not add explanations or skip a line between journal entries. CNOW journals will automatically indent a credit entry when a credit amount is entered. 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 $(3).$

CHART OF ACCOUNTS

White Diamond Flour Company

General Ledger

ASSETS

$110$ Cash

$121$ Accounts Receivable

$125$ 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$-$Sifting 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

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

$390$ Income Summary

REVENUE

$410$ Sales

$610$ Interest Revenue

EXPENSES

$510$ 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