Preparing a cost of production report when there are lost units. The second producing department of the Northwestern Company is the Fin- ishing Department. The average cost method is used to price its beginning work in process inventory. The cost of lost units is absorbed by the remaining good units. The Work in Process-Finishing Department account is shown below.

The monthly production report for March is shown below.

Instructions 1. Prepare the equivalent production computations for the Finishing Department for March 19X5.
2. Prepare the cost of production report for the Finishing Department for March 19X5. Carry the unit costs to three decimal places. (Do not show a separate entry for lost units.)

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Work in Process-Finishing Department No. 124 DATE EXPLANATION POST. REF. DEBIT CREDIT BALANCE DR. CR. 19 X5 Mar. 1 Balance 31 Materials 31 Labor 31 Overhead 26,997 00 Dr. MR10 20,425 00 47,422 00 Dr. J10-26 56,000 00 103,422 00 Dr. J10-27 28,000 00 131,422 00 Dr. J10-28 177,184 77 305,994 04 Dr. 31 From Framing The balance of this account on March 1, 1985, consists of the following costs: Costs in Prior Department $20,040.00 Costs in Current Department Materials 3,257.00 Labor 2,500.00 Overhead 1,200.00 Total $26.997.00