Final answer:
To create a production cost report, calculate material, labor, and overhead costs for both the completed units and the work in process units. Allocation is based on the stage of completion, with all units 100% for materials and 20% for conversion costs in WIP.
Step-by-step explanation:
To prepare a production cost report for the Sanding Department of Cullumber Furniture Company, we need to assess the materials, labor, and overhead costs for the units completed and transferred out as well as units remaining in the work in process (WIP). The total material cost is provided as $27,720, and since all units in WIP are 100% complete in terms of materials, the material cost applies to all units as a whole. For conversion costs (labor and overhead), which amount to $17,640 and $30,240, respectively, only 20% is attributed to the WIP units, while the rest is allocated to the units completed and transferred out.
The production cost report includes these calculations, detailing the allocation of costs between completed units and WIP units. The report provides crucial insights for managerial accounting and the determination of production efficiency and product costing within the company. It serves as a snapshot of manufacturing activity and cost flow during the period.