Preparing a cost of production report when there are lost units. The Lakeside Company uses a process cost accounting system. On May Il 19X8, the company had 600 units in production in the Assembly Department (the second department). All materials had been added to these units, but processing was only 60 percent complete. Costs applicable to the beginning work in process inventory follow:

Costs in prior department $14,000 Materials 4,000 Labor 3,000 Overhead 5,000 During the month of May an additional 10,500 units were transferred into the department with prior department costs of $185,000. Also during May, additional costs were incurred in the department as follows:
Materials $158,200 Labor 117,800 Overhead 232,200 A total of 9,800 units were transferred out to finished goods. The ending work in process inventory consisted of 1,000 units, to which all materials had been added, but only 80 percent of the production had been completed. The other units were lost at the start of the manufacturing process in this department. Assume that the company uses the FIFO method of costing.

Instructions 1. Complete the equivalent production computations.
2. Prepare a cost of production report for the Assembly Department. Assume that the loss of units occurs at the beginning of production in the department and that all lost units came from the work transferred into the department during the month of May 19X8.