Question

te 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
(700 units, 3/5 completed):
Direct materials (700 × $2.05)	$1,435
Conversion (700 × 3/5 × $0.50)	210
	$1,645

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

Direct materials transferred from Milling Department:
17,800 units at $2.15 a unit	$38,270
Direct labor	4,440
Factory overhead	5,339

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.	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 correct wording of account titles. 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). 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 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 Costs 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 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 correct wording of account titles. Use the date July 31 for all journal entries. PAGE 10 JOURNAL DATE DESCRIPTION POST. REF. DEBIT CREDIT 1 2 3 4 . 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. 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.

Answer 1

Cost of Production Report-Mixing Department
For the Month Ended March 31
UNITS	Whole Units	Equivalent Units
		Direct Materials	Conversion
Units charged to production:
Inventory in process, July 1	700	700	700
Received from Milling dept	17,800	17,800	17,800
Total units accounted for by the shifting Department	18,500	18,500	18,500
Units to be assigned costs:
Inventory in process, July 1 (3/5 completed)	700	0	280	(700*2/5)
Started and completed in July	16,300	16,300	16,300
Transferred to packaging Department in July	17,000	16300	16580
Inventory in process, July 31 (4/5 completed)	1,500	1,500	1200	(1500*4/5)
Total units to be assigned costs	18500	17800	17780
COSTS	Costs
	Direct Materials	Conversion	Total
Cost per equivalent unit:
Total costs for July in shifting Department	$38,270	$9,779	$48,049
Total equivalent units	17800	17780
Cost per equivalent unit	$2.15	$0.55	$2.70
Costs assigned to production:
Inventory in process, July 1	$1,435	$210	$1,645
Costs incurred in July	$38,270	$9,779	$48,049
Total costs accounted for by the Shifting Department	$39,705	$9,989	$49,694
Cost allocated to completed and
partially completed units:
Inventory in process, July 1 balance			$1,645
To complete inventory in process, July 1 (280*.55)	$0.00	$154	154
Cost of completed July work in process			$1,799
Started and completed in July (16300*2.15 and .55)	$35,045	$8,965	44,010
Transferred to Packaging Department in July	$35,045.00	$9,119.00	45,809
Inventory in process, July 31 (1500*2.15)+(1200*.55)	$3,225	$660	$3,885
Total costs assigned by the Shifting Department	$38,270.00	$9,779.00	$49,694
ans 2	Dr	Cr
Work In process Inventory-Shifting Department	$38,270
Work In process Inventory-Milling Department		$38,270
Work In process Inventory-Packaging Department	45,809
Work In process Inventory-Shifting Department		45,809
ans 3	Increase
Direct material	$0.10	(2.15-2.05)
Direct Labor	$0.05	(.55-.5)
working
Cost Analysis for June - Shifting Department
	Amount	Equivalent Units	Cost per Unit
Direct Materials in inventory in process, July 1	$1,435	700	$2.05
Conversion costs in inventory in process, July 1	$210	420	$0.50
		(700*3/5)	$2.55
ANS 3
Cost Analysis for July- Shifing Department
	Amount	Equivalent Units	Cost per Unit
Costs for July: Direct Materials	$38,270	17800	$2.15
Costs for July: Conversion	$9,779	17780	$0.55
		Total cost per unit	$2.70
ans 4 Already done by you
If any doubt please comment