Question

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 (600 units, 3/5 completed):
Direct materials (600 × $2.25)	$1,350
Conversion (600 × 3/5 × $0.30)	108
	$1,458

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

Direct materials transferred from Milling Department:
15,800 units at $2.35 a unit	$37,130
Direct labor	4,520
Factory overhead	1,003

During July, 15,100 units of flour were completed. Work in Process-Sifting Department on July 31 was 1,300 units, 4/5ths completed.

	Required:
1.	Prepare a cost of production report for the Sifting Department for July. If required, round your cost per equivalent unit answers to two decimal places. If an amount is zero, enter zero “0”.
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.
3.	Determine the increase or decrease in the cost per equivalent unit from June to July for direct materials and conversion costs. If required, round your answers to two decimal places.
4.	Discuss the uses of the cost of production report and the results of part (3)

Answer 1

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.