Preparing a cost of production report when there are lost units. The Hernandez Company uses a process cost system. On October 1, 19X6, the company had 800 units in production in the Cooking Department, the second of three producing departments. All materials had been added to this beginning inventory, but labor and overhead were only 75 percent complete. Costs applicable to the beginning work in process inventory follow:

Costs in Prior Department $15,182.00 Materials 2,416.00 Labor 3,360.00 Overhead 1,920.00 During the month of October, an additional 19,200 units were transferred into the Cooking Department with prior department costs of $143,952. Additional costs were incurred in the Cooking Department as follows:
Materials $57,059.00 Labor 11,268.00 Overhead 57,920.00 A total of 18,500 units were transferred out to the third department during the month, 1,000 units were still in production at the end of the month, and 500 units were lost in production. All materials had been added to the ending work in process inventory, but labor and overhead were only 70 percent complete.

Instructions 1. Prepare the equivalent production computations for the Cooking Department for October 19X6.

2. Prepare the cost of production report for the Cooking Department for October 19X6, assuming that the average cost method of handling work in process inventory is used. Show a separate adjustment for lost units.