Please help, I am stuck in the second portion. If possible please explain how yo
ID: 2341854 • Letter: P
Question
Please help, I am stuck in the second portion. If possible please explain how you got the answer. Thanks in advance.
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 × $2.25)
$1,800
Conversion (800 × 3/5 × $0.40)
192
$1,992
The following costs were charged to Work in Process-Sifting Department during July:
Direct materials transferred from Milling Department:
16,400 units at $2.35 a unit
$38,540
Direct labor
4,480
Factory overhead
2,945
During July, 16,100 units of flour were completed. Work in Process-Sifting Department on July 31 was 1,100 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).
Cost of Production Report
Shaded cells have feedback.
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
Points:
18 / 18
Feedback
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
Work in Process-Sifting Department
(800 units, 3/5 completed):
Direct materials (800 × $2.25)
$1,800
Conversion (800 × 3/5 × $0.40)
192
$1,992
Explanation / Answer
Units charged to production Wholeunits Material Conversion Inventory in beginning 800 Received from Milling deptt 16400 Total units acconted for 17200 Units to be assigned cost: Inventory in beginning 800 0 320 Started and completed in July 15300 15300 15300 Transferred to packing deppt 16100 15300 15620 Inventory in process at end 1100 1100 880 Total units to be assigned cost 17200 16400 16500 Cost: Material Conversion Total Cost per equivalent unit" Total cost for july in sifting deptt 38540 7425 45965 Total equivalent units 16400 16500 Cost per equivalennt unit 2.35 0.45 Cost assigned to production: Inventory in beginning 1800 192 1992 Cost incurred in July 38540 7425 45965 Total cost accounted for Sifting deptt 40340 7617 47957 Cost allocated: Inventory in process Beginning 1800 192 1992 To complete July 1 WIP 0 144 144 Cost of completed July1 WIP 1800 336 2136 Started and completed in July 35955 6885 42840 Transferred to Packaging deptt 37755 7221 44976 Inventory in process at end 2585 396 2981 Total cost assigned by sifting deptt. 40340 7617 47957 Journal entry: S.no. Accounts title and explanations Debit $ Credit $ a. WIP-Sifting Dr. 38540 WIP Milling 38540 b. WIP-Packaging Dr. 44976 WIP-Sifting 44976 Req 3. Effect Increase by Material Increasse 0.1 Conversion Increase 0.05 Req 4. Uses of Production cost report: * Report helps in proper allocation of cost among WIP and units completed based on degree of completion. * Report makes systematic allocation of cost. * Report helps in comparison of cost incurred per unitt with the previous cost incurred.