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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:
Work in Process-Sifting Department
(1,000 units, 3/5 completed):
Direct materials (1,000\times $2.25) $2,250
Conversion (1,000\times 3/5\times $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 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
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
1,000
Received from Milling Department
15,400
Total units accounted for by the Sifting Department
16,400
Units to be assigned costs:
Inventory in process, July 1(3/5 completed)
400
Started and completed in July
14,800
14,800
14,800
Transferred to Packaging Department in July
14,800
Inventory in process, July 31(4/5 completed)
1,280
Total units to be assigned costs
14,800
14,800
14,800
Points:
6/18
Check My Work
1. Calculate equivalent units for direct materials and conversion costs.
COSTS Costs
Direct Materials Conversion Total
Cost per equivalent unit:
Total costs for July in Sifting Department
$36,190
$
Total equivalent units -:
31,280
-:
31,280
Cost per equivalent unit
$1.24
$1.24
Costs assigned to production:
Inventory in process, July 1
$2,490
Costs incurred in July
36,190
Total costs accounted for by the Sifting Department
$36,190
Costs allocated to completed and partially completed units:
Inventory in process, July 1-balance
$176
To complete inventory in process, July 1
$
$176
176
Cost of completed July 1 work in process
$160
Started and completed in July
20,808
1,472
18,688
Transferred to Packaging Department in July
$22,280
Inventory in process, July 31
102
102
Total costs assigned by the Sifting Department
$42,996
Points:
2/22
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

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