Olde Stone Mill 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 December 1, 2010:
Work in Process—Sifting Department (1,200 units, 75% completed)……………………..$4,500
The following costs were charged to Work in Process—Sifting Department during December:
Direct materials transferred from Milling Department: 14,500 units……………………$51,400
Direct labor………………………………………………………………………………..14,350
Factory overhead…………………………………………………………………………...7,125
During December, 14,800 units of flour were completed. Work in Process—Sifting
Department on December 31 was 900 units, 75% completed.
Instructions
Prepare a cost of production report for the Sifting Department for December, using the average cost method.