Lexington Company produced baseball bats and cricket paddles. It has two departments that process all products. During July, the beginning work in process in the cutting department was half completed as to conversion and complete as to direct materials. The beginning inventory included $40,000 for materials and $60,000 for conversion costs. Ending work-in-process inventory in the cutting department as 40% complete. Direct materials are added at the beginning of the process.

Beginning work in process in the finishing department was 80% complete as to conversion. Trans-in is added at the beginning. Direct materials for finishing the units are added near the end of the process. Beginning inventories included $24,000 for transferred-in costs and $28,000 for conversion costs. Ending inventory was 30% complete. Additional information about the two departments follows:

Cutting: Beginning work in process units 20,000 Units started this period 60,000 Units transferred this period 64,000 Ending work-in-process units -

Finishing: Beginning work in process units 24,000 Units started this period ? Units transferred this period 68,000 Ending work-in-process units 20,000

Material costs added $48,000 cutting $34,000 finishing Conversion costs $28,000 cutting $68,500 finishing Transferred-out cost $128,000 cutting ? finishing

1) Prepare a production cost worksheet, using FIFO for the finishing department up to cost per equilivant units.

2) Prepare the computation to assign cost to transferred-out and the respective journal entry.