Preparing a cost of production report when there are lost units. The South Boston Company makes parts for textile machinery. The first producing department is the Machine Shop. The average cost method is used to price the beginning work in process inventory. The cost of lost units is absorbed by the remaining good units. The Work in Process—Machine Shop account is shown below.

The monthly production report for December is as follows

Instructions 1. Prepare the equivalent production computations for the Machine Shop for December 19X5.
2. Prepare the cost of production report for the Machine Shop for December 19X5, (Do not show a separate entry for lost units.)

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DATE Work in Process-Machine Shop No. 123 EXPLANATION POST. REF. DR. DEBIT CREDIT BALANCE CR. 19 X5 Dec. 1 Balance 4,034 52 Dr. 31 Materials MR10 49,451 84 53,495 36 Dr. 31 Labor J10-26 10,546 16 64,041 52 Dr. 31 Overhead J10-27 31,638 48 95,680 00 Dr. The balance of this account on December 1, 19X5, consists of the following costs: Materials $2,148.16 Labor 473.84 Overhead 1,421.52 Total $4,043.52