Carver Petroleum Inc. uses a process cost system with an average cost flow assumption to account for the production of its only product. The product is manufactured in two departments. Units of product are started in the Cracking Department and then transferred to the Refining Department, where they are completed. Because of the intense heat applied in the Cracking Department, some of the production volume is lost to evaporation. Because the department is capital intensive, the cost of direct labor is small relative to overhead. Consequently, labor and overhead are treated as one element of cost in the Cracking Department (that is, conversion cost). Data related to May operation in the Cracking Department are:

Required:
(1) Prepare a cost of production report for the Cracking Department for May.
(2) Prepare the general journal entry to record the transfer of cost out of the Cracking Department this month.

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Units in beginning inventory.. Units started in process this period..... Units transferred to there Refining Department this period Units in ending inventory (100% materials, 70% conversion cost) 5,000 55,000 49,000 6,000 BeginningAdded Inventory This Period Costs charged to the department: S1,900 Materials. Conversion cost. $20,100 5,080 240