Hulvey Brewery Company uses a process cost system with an average cost flow assumption to account for the production of its only product. Ingredients are mixed and brewed in the first department, Mixing and Brewing. Then the product is transferred to the Canning Department, where the liquid brew is put into cans and cases. Brewing requires application of heat and results in some normal shrinkage of volume in the Mixing and Brewing Department. In the Canning Department, some product is spoiled. Spoilage in Canning occurs at the 80-percent stage of conversion, and the lost units are complete as to materials. The shrinkage in Mixing and Brewing is viewed as part of normal production and is not measured; however, spoilage in Canning is viewed as an internal failure cost and charged to Factory Overhead Control. Data for January operations are:

Required:
(1) Prepare a January cost of production report for each department.
(2) Assuming the company uses a separate ledger account for work in process inventory in each department, prepare the general journal entry to record the transfer of cost out of each department during January.

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Mixing and 4,000 36,000 28,000 Brewing Canning Units in beginning inventory... 2,000 Units started in process in Mixing and Brewing Department this period Units transferred from Mixing and Brewing to Canning 28,000 Department Units transferred to Finished Goods Inventory this period. 25,000 4,000 6,000 Units spoiled in process this period. Units in ending inventory: Mixing and Brewing (100% materials, 40% labor and overhead). 6,000 Canning (100% materials, 60% labor and overhead)... 1,000 Cost in beginning inventory $550 190 75 150 Cost from preceding department. $600 Labor Factory overhead. 128 Cost added during the current period: Materials Labor Factory overhead 4,840 824 1,088 1,520 789 1,578 ...