COST OF PRODUCTION REPORT: TWO DEPARTMENTS, FIFO COSTING The Slowburn Candle Company makes decorative candles. The company uses a process cost system which involves two processing departments. At the beginning of Department 1, liquid wax is placed into process. In Department 2. liquid dyes are added to the units transferred in. The dyes are added at the beginning of the process and increase the number of units. The company uses fifo costing to account for beginning work-in-process inven- tory. CHAPTER 7: PROCESS COST I: EXPANDED CONCEPTS 333 The company's data for June are shown below: DEPARTMENT 1 DEPARTMENT 2 Beginning units in process: 100% direct materials, 50% conversion costs 30,000 100% direct materials: 70% conversion costs 20,000 Units started in process 160,000 Units received from preceding department 150,000 Units added to production 5,000 Ending units in process 100% direct materials, 20% conversion costs 40,000 100% direct materials, 80% conversion costs 35,000 Costs of beginning work-in-process inventory $21,300 $19,500 Costs added by department during the period: Direct materials 17,600 9,300 Direct labor 54,340 87,780 Factory overhead (applied) 27,170 43,120 Required: Prepare a cost of production report for Departments 1 and 2