Equivalent units and related costs; cost of production report: entriesWhite Diamond Flour Company manufactures flour by a series of threeprocesses, beginning with wheat grain being introduced in the MillingDepartment. From the Milling Department, the materials pass throughthe Sifting and Packaging departments, emerging as packaged refinedflour.Work in Process-Sifting Department (900 units, 3/5 completed): Direct materials (900 x $2.05) $ 1,845 Conversion (900 x K x $0.40) 216   $2,061 The following costs were charged to Work in Process-SiftingDepartment during July: Direct materials transferred from Milling Department;   15,700 units at $2.15 a unit $33,755 Direct labor 4,420 Factory overhead 2,708 During July, 15,500 units of flour were completed. Work in Process-Sifting Department on July 31 was 1, 100 units, 4/5 completed.Instructions1. Prepare a cost of production report for the Sifting Department for July.2. Journalize the entries for costs transferred from Milling to Sifting andthe costs transferred from Sifting to Packaging.3. Determine the increase or decrease in the cost per equivalent unitfrom June to July for direct materials and conversion costs. 4. Discuss the uses of the cost of production report and the results of part (3).

Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter3: Process Cost Systems
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Problem 3PA: Equivalent units and related costs; cost of production report;entries White Diamond Flour Company...
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Equivalent units and related costs; cost of production report: entries
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.
Work in Process-Sifting Department (900 units, 3/5 completed):

Direct materials (900 x $2.05) $ 1,845
Conversion (900 x K x $0.40) 216
  $2,061

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

Direct materials transferred from Milling Department;  
15,700 units at $2.15 a unit $33,755
Direct labor 4,420
Factory overhead 2,708

During July, 15,500 units of flour were completed. Work in Process-
Sifting Department on July 31 was 1, 100 units, 4/5 completed.
Instructions
1. Prepare a cost of production report for the Sifting Department for July.
2. Journalize the entries for costs transferred from Milling to Sifting and
the costs transferred from Sifting to Packaging.
3. Determine the increase or decrease in the cost per equivalent unit
from June to July for direct materials and conversion costs.

4. Discuss the uses of the cost of production report and the results of part (3).

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