Cost of Production Report and Journal Entries; Average Costing. Rathbone Tool Corporation manufactures a single model of a commercial cutting tool. The product is cast from molten steel in the Casting Department, and then it is transferred to the Finishing Department, where it is ground and polished. Data related to December operations are: LO3 Casting Finishing Units in beginninginventory. 1,000 1,500 Units started in process in Casting Department thisperiod. 8,000 Units transferred from Casting to Finishing thisperiod. 7,500 7,500 Units transferred from Finishing to Finished Goods thisperiod. 7,000 Units in ending inventory:

Casting Department (100% materials and 80% conversioncost). 1,500 Finishing Department (40% labor and 50%overhead). 2,000 Casting Finishing Cost in beginning inventory:

Cost from precedingdepartment. $4,785 Materials. $915 Labor. 60 201 Factoryoverhead. 90 555 Cost added during the current period:

Materials.

Labor.

Factoryoverhead.

Casting Finishing

$17,085 4,290 $2,139 6,435 3,125 Required:

(1) Assuming the company uses a process cost system with an average cost flow assumption, prepare a cost of production report for each department for the month of December. s

(2) Assuming the company maintains a separate work in process account for each of its two producing depart¬ ments, prepare the appropriate general journal entries to record the charge to the producing departments for the costs incurred during December and to record the transfer of units from Casting to Finishing and from Finishing to Finished Goods Inventory.