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:

Work in Process-Sifting Department
(900 units,    completed):
Direct materials (900 × $2.05)	$1,845
Conversion (900 ×    × $0.40)	216
	$2,061

The following costs were charged to Work in Process-Sifting Department during July:

15,700 units at $2.15 a unit	$33,755
Direct Labor	4,420
Factory Overhead	2,708

During July, 15,500 units of flour were completed. Work in Process-Sifting Department on July 31 was 1,100 units,   completed.

Required:

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 transferred from Sifting to Packaging.

Answer 1

Particulars Direct Materials Conversion costTotal Openning Invento Openning WIP Started and compeleted Transferred out Ending WIP Total cost assigned $2,061 $162 $6,570$37,960 S40,183 S396$2,761 $42,944 $162 $31,390 $2,365 Account Title & Explanation Debit Credit Work in Process- Shiftin $33,755 Work in Process - Millin $33,755 (Record cost transferred from milling to shifting) Finished Goods - Packin S40,183 S40,183 Work in Process Shiftin (Record transferred from shifting to packing)