Question

Equivalent units and related costs; cost of production report; entries Instructions Chart of Accounts Cost of Production Report Journal Final Questions Instructions White Diamond Flour Company manufactures flour by a series of three processes, beginning with wheat grain being introduced in the Milling Department. From the Miling Department, the materials pass through the Sitting 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 Sitting Department (800 units, 3/5 completed) Direct materials (800 x $225) $1,800 Conversion (800 x 3/5 * $0.40) 192 $1,992 The following costs were charged to Work in Process-Sitting Department during July D Direct materials transferred from Miling Department 16.400 units at $2.35 a unit $38,540 Direct labor 4.480 < Previous N Check My Work Save and Exit Submit Assignment All work saved 00 ENG O ED

Answer 1

Part 1

XIA 5 2020-09(2) SEP.xlsx - Microsoft Excel ? X FILE HOME INSERT PAGE LAYOUT FORMULAS DATA REVIEW VIEW DEVELOPER Sign in J3 fi с D F G H H J K L M N 3 4 E White Diamond Flour Company Siftings Department production Report First in First out (FIFO) Method Month ended May 31,2018 5 6 7 8 validation Physical units Equivalent Units of production cost Assignment 9 10 11 Summary of Physical units Units in beginning WIP inventory Units started during month Total unit to be accounted for Units completed and transferred out Units in ending WIP inventory Total unit accounted for 800 16400 17200 16100 1100 12 13 14 17200 15 Step for solution Step 1 Equiv Step 2 Calcu Step 3 Cost Step 4 Cost Step 5 Cost 16 Equivalent Units of production 17 18 19 Particulars units in beginning WIP inventory Units in Started and completed (16100-800) units in ending WIP inventory Equivalent Units of production Physical units % 800 15300 Direct material units % 0% 0 100% 15300 100% 1100 16400 Conversion Cost units 2/5 320 100% 15300 4/5 880 16500 20 For direct material 10 For conversion cost (€ 21 1100 22 23 24 Summary of cost to be accounted 25 26 Conversion Direct material Cost Total 1800 192 38540 7425 Cost in beginning WIP Cost incurred during Month (Add) (4480+2945) total cost to be accounted for 1992 45965 27 28 40340 7617 47957 Cost of beginnir Less: Direct mat Conversion cost Activate Windo Divided by: Eau Go to Settings to activate WinGOWS. 29 Sheet10 Sheet11 Sheet12 Sheet13 Sheet14 Sheet15 Sheet16 Sheet17 Sheet18 + READY 3 + 100% i Search the web and Windows O ENG US 04:10 15-09-20

XIA 5 2020-09(2) SEP.xlsx - Microsoft Excel ? X FILE HOME INSERT PAGE LAYOUT FORMULAS DATA REVIEW VIEW DEVELOPER Sign in J27 х foc C D E F H K L M N G 45965 38540 7425 27 28 Cost incurred during Month (Add) (4480+2945) total cost to be accounted for 40340 7617 47957 Less: Direct mat Conversion cost Divided by: Equ Conversion cost $ 29 30 31 38540 cost per Equivalent Unit Cost incurred during Month Equivalent Units of production Cost per Equivalent Unit 32 7425 16500 0.45 $ 16400 2.35 $ 33 $ 2.80 34 35 36 37 Assign costs to units transferred out and units in ending WIP inventory cost assigned to units transferred out Direct material Conversion Cost Cost in beginning WIP 1800 38 192 39 1,992 40 41 0 42 Direct material (0*2.35) Conversion Cost (320*0.45) Cost incurred for complete beginning WIP 144 43 144 44 45 35955 46 6885 Direct material (15300*2.35) Conversion Cost (15300*0.45) Cost of units in Started and completed cost assigned to units transferred out 47 42,840 44,976 48 49 50 51 2585 396 52 cost assigned to units ending work in progress Direct material (1100*2.35) Conversion Cost (880*0.45) cost assigned to units ending work in progress Total cost assigned ... Sheet10 Sheet11 Sheet12 Sheet13 53 54 2,981 47.957 Sheet18 Activate Windows Go to Settings to activate Windows. Sheet14 Sheet15 Sheet16 Sheet17 + 1 READY + 100% i Search the web and Windows O ENG US 04:10 15-09-20

Part 2

journal entries
Date	account title	debit	credit
July 1	Work in progress - sifting department	$                  38,540
	Work in progress - milling department		$          38,540
	To cost transferred from milling to sifting department.
July 31	Work in progress - packaging department	$                    7,425
	Work in progress - sifting department		$            7,425
	To cost transferred from sifting to packaging department.

Part 3

Cost of beginning work in progress	1992
Less: Direct material cost included in beginning work in progress (Less)	1800
Conversion cost in beginning work in progress	192
Divided by: Equivalent unit for conversion cost for previous month (800*60%)	480
Conversion cost per equivalent unit in previous month	$       0.40

	Direct material	Conversion Cost
Cost per equivalent unit in current month	$       2.35	$       0.45
Cost per equivalent unit in previous month	$       2.25	$       0.40
Increase in cost per equivalent unit	$       0.10	$       0.05

Part 4

Cost of production report should be used to determine the value of ending working progress and cost transferred out to next department.

Material cost per equivalent unit is increased from 2.25 to 2.35 due to the increase in material prices or inefficient material usage.

Conversion cost per equivalent unit is increased from 0.10 to 0.05 due to the inefficient usage of conversion costs.