Instructions White Diamond Flour Company manufactures flour by a series of three
ID: 2331698 • Letter: I
Question
Instructions White Diamond Flour Company manufactures flour by a series of three processes, beginning with wheat grain being introduced in the Milling Departm 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 1,2016: Work in Process-Sifting Department (600 units, completed): Direct materials (600 x$2.25) $1,350 Conversion (600.30 108 $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 Direct labor Factory overhead $37,130 4,520 1,003 During July. 15,100 units of flour were completed. Work in Process-Sifting Department on July 31 was 1,300 units, completed.Explanation / Answer
Unit Reconciliation Particulars Units Begn WIP 600 units completed 15800 units to be accounted for in the month 16400 Completed and transferred 15100 Ending WIP 1300 Equivalent units of production Particulars Units % Materials EUP Materials % Conversion EUP Conversion Begn 600 0 0 60% 360 Started and Completed 14500 100% 14500 100% 14500 Completed and transferred 15100 14500 14860 Ending bal 1300 100% 1300 80% 1040 EUP units of production 16400 15800 15900 Particulars Trans Mat Conversion Total Cost to be accounted for Begn Cost Cost during the month $37,130 $5,523 $42,653 Total Cost $37,130 $5,523 $42,653 EUP Units 15800 15900 31700 EUP /Unit $2.35 $2.68 $5.03 WN Cost of Beg WIP $1,458 Cost incurred during the period-360*2.68 $965 Total Cost Units started and completed 15800*5.03 $79,474 $81,897 Journal entries Dr Amount Cr Amount a WIP -Shifting $37,130 To WIP-Millimg $37,130 to record the cost of transfer from milling to shifting b WIP -Packaging $81,897 To WIP-Shifting $81,897 to record the cost of transfer from shifting to packaging Material Conversion 3 1-Jul $2.25 $0.30 31-Jul $2.35 $2.68 Increase/(Decrease) $0.10 $2.38 4 Cost of prodcution report is used to calculate the cost of transferred out units and Ending WIP