Cost of Production Report; Increase in Quantity with Added Materials; Average Costing. Donegal chemical Company produces a chemical cleaning solvent in three departments, Refining, Blending, and Finishing. The process begins in the Refining Department, where the base solvent is removed from a petroleum derivative purchased from a large oil refinery. The base solvent is then transferred to the Blending Department, where cleaning compounds are added to the solvent, increasing the total quantity of the product. The blended prod¬ uct is then transferred to the Finishing Department, where it is filtered one last time and bottled for storage and shipment to customers. Since only one product is manufactured by the company, a process cost system is used. The company uses the average cost flow assumption to account for its work in process inventories. Data related to March operations in the Blending Department are: LO3 Units in beginninginventory.

Units received from the Refining Department thisperiod.

Units added to process in the Blending Department thisperiod.

Units transferred to Finishing Department thisperiod.

Units in ending inventory (100% materials, 80% labor, and 90% overhead).

Beginning Inventory Costs charged to the department:

Costs from the precedingdepartment. $4,750 Materials. 2,375 Directlabor. 180 Factoryoverhead. 767 Required: Prepare a March cost of production report for the Blending Department.

5,000 20,000 5,000 26,000 4,000 Added This Period

$25,250 12,625 2,740 8,113