(Appendix) Spoilage in a Process Cost System with a Fifo Cost Flow Assumption. Sun Valve Company sells a single product that is manufactured in two departments, Tooling and Finishing. Units of product are started in the Tooling Department, where they are cut and shaped. The units are then transferred to the Finishing Department where they are ground and polished. Materials are added at the beginning of the process in the Tooling Department. Units are inspected at the 90-percent stage of completion in the Tooling Department. The cost of spoilage is charged to Factory Overhead Control. Cost data related to March operations in the Tooling Department are: LO6 5,000 55,000 49,000 6,000 Beginning Added Inventory This Period

$1,900

$20,100 360 7,620 Costs charged to the department:

Materials.

Labor.

Factory overhead.

Beginning Inventory

$1,600 290 950 Added This Period

$9,750 2,320 9,200 At the end of February, the Tooling Department had 2,000 units still in process, 70% complete as to labor and 60% complete as to overhead. At the end of March, 3,000 units were still in process in the Tooling Department, 50% complete as to labor and 40% complete as to overhead. During March, 13,000 units were started in the Tooling Department, and 7,000 units were completed and transferred to the Finishing Department.

Required:

(1) Assuming the company uses a process cost system with fifo costing to account for its production, prepare a cost of production report for the Tooling Department based on the data presented for March.

(2) Prepare the appropriate general journal entry to record the transfer of cost out of the Tooling Department this period.