The work in process is 3/5 PR 18-3A Equivalent units and entries Lily Flour Comp

Question

The work in process is 3/5

PR 18-3A Equivalent units and entries Lily Flour Compan wheat grain being introduced in the Milling Department. From ting as packaged the materials pass through the Sifting and Packaging departm related costs; cost of production report; OBJ. 2, 3, 4 to y manufactures flour by a series of three processes, beginning with refined flour ents, emerging as package The balance in the account Work in Process-Sifting Depa July 1, 2014 rtment was as follows on work in Process-sifting Department (700 units, i/s completed): Direct materials (700 x $2.58) Conversion (700x%x50.55) $1,806 231 $2,037 The following costs were charged to Work in Process-Sifting Department during July: Direct materials transferred from Milling Department $31,980 4,670 2,758 12,300 units at $2.60 a unit Direct labor Factory overhead During July, 12,000 units of flour were completed. Work in Process-Sifting Department on July 31 was 1,000 units, % 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 trans- ferred 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

Explanation / Answer

FIFO method Beggining units 700 Transferred out 12,000 Started into production 12300 Ending units 1,000 13000 13000 Equivalent units Material Conversion Beginning units 700 700 Completion in current period 0% 40% A 0 280 Units started and completed 11300 11300 Completion 100% 100% B 11300 11300 Ending Units 1,000 1,000 Completion 100% 80% C 1000 800 Total units A+B+C 12300 12380 Cost per equivalent units Per unit cost Cost Total units Per unit cost Material cost 31980 12300 2.60 Conversion cost 7428 12380 0.60 Total 39408 3.20 Cost of goods sold Material convertion cost Beginning inventory completed Completion 0% 40% Per unit cost 2.60 0.60 Units 700 700 Total cost   A 0.00 168 168 Units started and completed Completion 100% 100% Per unit cost 2.60 0.60 Units 11300 11300 Total cost    B 29380 6780 36160 Beginning work in progress C 1806 231 2037 Total cost A+B+C 38365 Ending work in progress Completion 100% 80% Per unit cost 2.60 0.60 Units 1,000 1,000 Total cost     2600 480 3080 Total cost accounted for 41445 Debit Credit Work in progress shifting department 31980              Work in progress milling department 31980 Work in progress packing department 38365 Work in progress shifting department 38365 Cost per equivalent unit Material Conversion cost For current period 2.60 0.60 For beginning inventory 2.58 0.55 increase (decrease) 0.02 0.05

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