Production Cost Report

Kao Tiles, Inc., is a specialized producer of ceramic tiles. Its production process involves highly skilled workers and top-quality ceramic crafsmen. Work in Process is relatively large because each tile is in process for up to three weeks because of art, mold work, and drying time. October began with 5,000 units (a units is 1 ceramic tile) in process, on average 65 percent complete as to direct materials and 35 percent complete as to conversion costs; 6,000 units were started during the month, and ending Work in Process inventory consisted of 7,000 units that were on average 75 percent complete as to direct materials and 50 percent complete as to conversion costs.

Cost Information	Beginning Work in Process	Costs Added in October
Direct material	$170,000	$422,000
Direct labor	160,000	1,055,000
Manufacturing overhead	50,000	107,500

Required

a. Prepare a production cost report for the month of October.

b. Prepare the journal entry to recognize the transfer of the units completed and transferred to finished goods during October.