Equivalent units and related costs; cost of production report; entries

Baker’s Choice Flour Company manufactures flours by a series of three
processes, beginning with wheat grain begin introduced in the Milling
Department. From the Milling Department, the materials pass through the
sifting and Packaging Department, emerging as packaged refined flour.

The balance in the account Work in Process—Sifting Department was as
follows on July 1, 2003:

Work in Process—Sifting Department (25,800 units, ѕ completed)
$38,700

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

Direct materials transferred from Milling Department: 640,000units

at $1.15 a unit $736,000

Direct labor 148,742

Factory overhead 92,406

Instruction:

Prepare a cost of production for the shifting Department for July.

Journalize the entries for costs transferred from Milling to sifting and
the costs transferred from sifting to Packaging.

Discuss the uses of the cost of production report.