Problem:
Blue Ribbon Flour Company manufactures flour by a series of three processes, beginning 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 October 1, 2008:
Work in Process-Sifting Department (15,000 units, 75% completed) .... $42,000
The following costs were charged to Work in Process-Sifting Department during October:
Direct materials transferred from Milling Department: 235,800 units ... $632,600
Direct labor ........................................................................ 160,735
Factory overhead ................................................................... 76,900
During October, 233,800 units of flour were completed. Work in Process-Sifting Department on October 31 was 17,000 units, 75% completed.
Instructions
Prepare a cost of production report for the Sifting Department for October, using the average cost method.