Cost of Production Report and Journal Entries; Average Costing. Modem Cabinet Company manufactures a single model of a commercial prefabricated wooden cabinet. The company uses a process cost system with an average cost flow assumption. It maintains a separate work in process account for each of its two producing departments, Cutting and Assembly. The basic cabinet components are cut out of wood in the Cutting Department and then transferred to the Assembly Department, where they are put together with the addition of hinges and handles purchased from outside vendors. Data related to manufacturing operations in August are: LO3 Cutting Assembly Units in beginninginventory. 200 250 Units started in process in Cutting Department thisperiod. 600 Units transferred from Cutting to Assembly thisperiod. 650 650 Units transferred from Assembly to Finished Goods thisperiod. 800 Units in ending inventory:

Cutting Department (90% materials and 60% conversioncost). 150 Assembly Department (40% materials and 20% conversioncost). 100 Cutting Assembly Cost in beginning inventory:

Cost from precedingdepartment. $17,410 Materials. $5,365 3,451 Labor. 530 3,611 Factoryoverhead. 795 3,611 Cost added during the current period:

Materials. 26,035 13,433 Labor. 8,350 20,989 Factoryoverhead. 12,525 20,989 Required:

(1) Prepare a cost of production report for each department for August.

(2) Prepare the appropriate general journal entries to record the charge to the producing departments for the costs incurred during August and to record the transfer of units from Cutting to Assembly and from Assembly to Finished Goods Inventory.