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, emenging as packaged refined flour. The balance in the account Work in Process-Sifting Department was as follows on July 1: The following costs were charged to Work in Process-Sifting Department during July: During July, 17.000 units of flour were completed. Work in Process-Sifting Department on July 31 was 1.500 units, 4/5 completed. Required: 1. Frepare a cost of production report for the Sifting Department for fuly 2. Joumalize the entries for costs transferred from Miling to Sifting and the costs transferred frovn Sitting to Peckiaging 3. Determine the increase or decrease in the cost per equivalant unit from fune Ma fuly for cirect malerials and converaion coats. 4. Diacuss the uses of the cost of production report and the reaults of part (9) 1. Calculate equivalent units for direct materials and conversion costs. Chart of Accounts CHART OF ACCOUNT $ White Diamond Flour Company General Ledger ASSETS 110 Cash 121 Accounts Receivable 125 Notes Receivable 126 Interest Receivable 131 Materials 141 Work in Process-Miling 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 Acoumulated Depreciation-Factory 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 LMAILTIES 210 hocounts Payable 294 Uhities Payable 294 Notes Peyatie 236 Interest Payalik 251 Wuges Peyale Equisy 1. Prepare a cost of production report for the Sifting Department for July. Cost of Production Regort Instructions 2. Joumalize the entries for costs transferred from Milling to Sifting and the costa transferred from Sifting to Packaging. Use the date July 31 for all jouma/ entries. Geners Joumal Intructions Ouestion not attempted. Feedback 7. Cheok-My Work 2 Remember that there are three types of inventory: materials, work in process, and finished goods. What costs are captured in the Work in Process account? Are these units 100% Final Questions 3. Determine the increase or decrease in the cost per equivalent unit from June to July for direct materials and conversion costs. 3. Detemine the increase or decrease in the cost per equivalent unit from June to July for direct materials and conversion costs. Additional instruction Direct materials: Conversion: 4. Discuss the uses of the cost of production report and the results of part (3). The cost of production report may be used as the basis for allocating product costs between and The 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. Feedback Oheck My Work 3. Compare the cost per equivalent unit for June and July. 4. Review the benefits of the cost of production report