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 $(800$ units, $3/5$ completed$)$:

Direct materials $(800\backslash$times $$2\mathrm{.}05)$ $$1,640$

Conversion $(800\backslash$times $3/5\backslash$times $$0\mathrm{.}50)240$

$$1,880$

The following costs were charged to Work in Process$-$Sifting Department during July:

Direct materials transferred from Milling Department:

$17,800$ units at $$2\mathrm{.}15$ a unit $$38,270$

Direct labor $4,440$

Factory overhead $5,361$

During July, $17,100$ units of flour were completed. Work in Process$-$Sifting Department on July $31$ was $1,500$ units, 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 equivalent unit answers to two decimal places.

$2.$ 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 journal explanations. Every line on a journal page is used for debit or credit entries. CNOW journals will automatically indent a credit entry when a credit amount is entered.

$3.$ Determine the increase or decrease in the cost per equivalent unit from June to July for direct materials and conversion costs. Enter all amounts as positive numbers. Round your answers to two decimal places.

$4.$ Discuss the uses of the cost of production report and the results of part $(3).1.$ Prepare a cost of production report for the Sifting Department for July. If an amount is zero, enter $"0".$ Round your Cost per equivalent unit answers to two decimal places.

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 $1$

Received from Milling Department

Total units accounted for by the Sifting Department

Units to be assigned costs:

Inventory in process, July $1(3/5$ completed$)$

Started and completed in July

Transferred to Packaging Department in July

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

Total units to be assigned costs

COSTS Costs

Direct Materials Conversion Total

Cost 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

$

Inventory in process, July $31$

Total costs assigned by the Sifting Department $2.$ 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 journal explanations. Every line on a journal page is used for debit or credit entries. CNOW journals will automatically indent a credit entry when a credit amount is entered. $3.$ Determine the increase or decrease in the cost per equivalent unit from June to July for direct materials and conversion costs. Enter all amounts as positive numbers. Round your answers to two decimal places.

Direct materials:

$

Conversion:

$

$4.$ 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.