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

$1.$ 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$)$

$1,000$

$0$

$400$

Started and completed in July

$13,800$

$13,800$

$13,800$

Transferred to Packaging Department in July

$14,800$

$13,800$

$14,200$

Inventory in process, July $31(4/5$ completed$)$

$1,600$

$1,600$

$1,280$

Total units to be assigned costs

$16,400$

$15,400$

$15,480$

Points:

$18/18$

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$

$$6,966$

Total equivalent units $-$:

$15,400$

$-$:

$15,480$

Cost per equivalent unit

$$2\mathrm{.}35$

$$0\mathrm{.}45$

Costs assigned to production:

Inventory in process, July $1$

$$2,490$

Costs incurred in July

$22,280$

Total costs accounted for by the Sifting Department

$$22,280$

Costs allocated to completed and partially completed units:

Inventory in process, July $1-$balance

$$2,490$

To complete inventory in process, July $1$

$$0$

$$180$

$180$

Cost of completed July $1$ work in process

$$2,670$

Started and completed in July

$1,600$

$6,210$

$2,250$

Transferred to Packaging Department in July

$$36,190$

Inventory in process, July $31$

$2,546$

$240$

$2,864$

Total costs assigned by the Sifting Department

$$43,294$

Points:

$13/22$

Check My Work

$1.$ Calculate the cost per equivalent unit for direct materials and conversion costs. Calculate the costs assigned to the beginning inventory, the units