Financial and Managerial Accounting: PR18-4A Blanco Flour Company manufactures flour by a series

Financial and Managerial Accounting

PROBLEM 18-4A Equivalent units and related costs; cost of production report; entries
Blanco 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 May 1, 2008:
Work in Process - Sifting Department (20,000 units, 80% completed):
Direct materials (20,000 x $1.37) 27,400
Conversion (20,000 x 80% x $0.55) 8,800
$36,200
The following costs were charged to Work in Process-Sifting Department during May:
Direct materials transferred from Milling Department:
560,000 units at $1.40 a unit 784,000
Direct labor 179,000
Factory overhead 101,200
During May, 568,000 units of flour were completed. Work in Process-Sifting Department on May 31 was 12,000 units, 70% completed.

Instructions:
1. Prepare a cost of production report for the Sifting Department for May. If an amount is zero, enter in a zero (0). When computing cost per equivalent unit, round to two decimal places. For example, $8.347 would be entered as 8.35.
2. Journalize the entries for (a) costs transferred from Milling to Sifting and (b) the costs transferred from Sifting to Packaging.
3. Determine the increase or decrease in the cost per equivalent unit from April to May for direct materials and conversion costs. Round to two decimal places. For example, $8.347 would be entered as 8.35.
4. Discuss the uses of the cost of production report, and the results of (3). The input in the box below will not be graded, but may be reviewed and considered by your instructor.
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