Baker’s Choice 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 July 1, 2006:
Work in Process—Sifting Department (25,800 units, 75% completed) .. $38,700
The following costs were charged to Work in Process—Sifting Department during July:
Direct materials transferred from Milling Department: 640,000 units .. $736,000
Direct labor .......................... 148,742
Factory overhead ....................... 96,720
During July, 650,000 units of flour were completed. Work in Process—Sifting Department on July 31 was 15,800 units, 25% completed.

Instructions
Prepare a cost of production report for the Sifting Department for July, using the average cost method.