Cost of Production Report and Journal Entries; Materials Added in Second Department Increases Production Quantity; Average Costing. Hytest Chemical Corporation produces aircraft fuel in a two-step process. Unrefined gasoline is purchased from a major oil company and refined in the Refining Department. The refined gasoline is then transferred to the Blending Department, where cleansers and other additives are mixed with the refined gasoline. The chemicals added in the Blending Department increase the total volume of fuel. The company uses a process cost system, with an average cost flow assumption, and it maintains a separate work in process account for each of its two producing departments. Data related to operations for the month of March are: LO3 Units in beginninginventory.

Units started in process in Refining Department this period.

Units transferred from Refining to Blending this period.

Units added to process in Blending Department this period.

Units transferred from Blending to Finished Goods this period Units in ending inventory:

Refining (100% materials, 75% labor, and 50% overhead) Blending (80% materials, 40% labor, and 40% overhead)..

Cost in beginning inventory:

Cost from preceding department...

Materials.

Labor.

Factoryoverhead.

Cost added during the current period:

Materials.

Labor.

Factoryoverhead.

Refining Blending 800 1,400 7,200 7,000 7,000 1,800 9,200 1,000 1,000 Refining Blending

$1,754

$728 620 30 68 60 160 7,272 4,380 1,520 3,100 2,940 5,600 Required:

(D Prepare a cost of production report for each department for March.

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