Financial Accounting Chapter 17 ExamWhite 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:Work in Process—Sifting Department (900 units, 3/5 completed) on July 1Cost SourceDollar AmountDirect Materials (900 x $3.15)$2,835Conversion (900 x 3/5 x $0.30)162Total Materials and Conversion2,997The following costs were charged to Work in Process—Sifting Department during July:Work in Process—Sifting DepartmentCost SourceDollar AmountDirect materials transferred from Milling Department: 15,700 units at $2.30 a unit$36,110Direct Labor5,420Factory Overhead2,384During July, 15,500 units of flour were completed. Work in Process—Sifting Department on July 31 was 1,100 units, 4/5 completed.Instructionsa.Prepare a cost of production report for the Sifting Department for July. b. Journalize the entries for costs transferred from Milling to Sifting and the costs transferred from Sifting to Packaging. c.Determine the increase or decrease in the cost per equivalent unit from June to July for direct materials and conversion costs. d. Discuss the uses of the cost of production report and the results of part (c).
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
Financial Accounting Chapter 17 ExamWhite 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:Work in Process—Sifting Department (900 units, 3/5 completed) on July 1Cost SourceDollar AmountDirect Materials (900 x $3.15)$2,835Conversion (900 x 3/5 x $0.30)162Total Materials and Conversion2,997The following costs were charged to Work in Process—Sifting Department during July:Work in Process—Sifting DepartmentCost SourceDollar AmountDirect materials transferred from Milling Department: 15,700 units at $2.30 a unit$36,110Direct Labor5,420Factory Overhead2,384During July, 15,500 units of flour were completed. Work in Process—Sifting Department on July 31 was 1,100 units, 4/5 completed.Instructionsa.Prepare a cost of production report for the Sifting Department for July. b.
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