White Diamond Flour Company manufactures flour by a series of three processes, b
ID: 2569020 • Letter: W
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, 2016:
The following costs were charged to Work in Process-Sifting Department during July:
Cost of Production Report
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1. Prepare a cost of production report for the Sifting Department for July.
Points:
18 / 18
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1. Calculate equivalent units for materials and conversion costs.
Points:
19 / 22
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Final Questions
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3. Determine the increase or decrease in the cost per equivalent unit from June to July for direct materials and conversion costs.
Work in Process-Sifting Department (600 units, completed): Direct materials (600 × $2.25) $1,350 Conversion (600 × × $0.40) 144 $1,494Explanation / Answer
1)
2) Journal Entry
3. Increase or decrease in the cost per equivalent unit from June to July for direct materials and conversion costs.
4.The cost of production report should be utilized as the basis for allocating product costs between WIP and Finished goods. The report should also be utilized to control costs by holding each department head responsible for the units entering production and the costs incurred in the department. Any differences in unit product costs from one month to another month, such as those in the part (3), can be read carefully and any major differences can be investigated.
WHITE DIAMOND FLOUR COMPANY Cost of Production Report-Sifting Department For the Month Ended July 31, 2016 UNITS Whole Units Equivalent Units Direct Materials Conversion Units charged to production: Inventory in process, July 1 600 Received from Milling Department 15,400 Total units accounted for by the Sifting Department 16,000 Units to be assigned costs: Inventory in process, July 1 ( 2/5 completed here) 600 - 240 Started and completed in July 13,800 13,800 13,800 Transferred to Packaging Department in July 14,400 13,800 14,040 Inventory in process, July 31 ( 4/)completed here) 1,600 1,600 1,280 Total units to be assigned costs 16,000 15,400 15,320 COSTS Costs Direct Materials Conversion Total Costs per equivalent unit: Total costs for July in Sifting Department $ 36,190.00 $ 6,894.00 $43,084.00 Total equivalent units $ 15,400.00 $ 15,320.00 Cost per equivalent unit $ 2.35 $ 0.45 $ 2.80 Costs assigned to production: Inventory in process, July 1 $ 1,350.00 $ 144.00 $ 1,494.00 Costs incurred in July $ 36,190.00 $ 6,894.00 $43,084.00 Total costs accounted for by the Sifting Department $ 37,540.00 $ 7,038.00 $44,578.00 Cost allocated to completed and partially completed units: Inventory in process, July 1 balance $ 1,350.00 $ 144.00 $ 1,494.00 To complete inventory in process, July 1 $ - $ 108.00 $ 108.00 Cost of completed July 1 work in process $ 1,350.00 $ 252.00 $ 1,602.00 Started and completed in July $ 32,430.00 $ 6,210.00 $38,640.00 Transferred to Packaging Department in July $ 33,780.00 $ 6,462.00 $40,242.00 Inventory in process, July 31 $ 3,760.00 $ 576.00 $ 4,336.00 Total costs assigned by the Sifting Department $ 37,540.00 $ 7,038.00 $44,578.00Related Questions
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