World Class Steaks is a meat processing firm based in Texas. It has two departments: preparation (prep) and shipping. For the prep department conversion costs are added evenly during the process and the first direct material, meat, is added at the beginning of the process. A second material, seasoning, is added at 75% point in the process. All completed units are transferred to the shipping department. In the shipping department, an additional material, packaging, is added to the product at the 10% point in the process. Completed units are transferred to finished goods. Additional information for both departments is presented below:

Preparation Department

Beginning Inventory contained 14,000 units (40% complete), meat - $13,700 and conversion $5,200.

Units started were 50,000; Units completed were 42,000. Ending Inventory is 70% complete with respect to conversion.

Within the Preparation Department, the following transactions occurred:

1. Meat purchased for $140,000 on account. Seasoning purchased for $17,000 for cash.
2. $130,000 of meat was put into process; seasoning used was $15,000.
3. Direct labor incurred was $60,000; Manufacturing Overhead incurred was $43,000.
4. Conversion is applied to production.
5. Completed product was transferred to the Shipping Department.

Shipping Department

Beginning Inventory contained 23,000 units (80% complete), transferred in $112,000,

packaging $15,000,

conversion $52,000

Ending Inventory contained 18,000 units (25% complete).

Within the Shipping Department, the following transactions occurred:

1. Packaging was purchased for $18,000.
2. $14,000 of packaging was used.
3. Direct labor incurred was $45,000; Manufacturing Overhead incurred was $48,000.
4. Conversion is applied to production.
5. Completed product was transferred to Finished Goods.

Finally,

1. 38,000 packages were sold for $12 each.
2. Selling and Administrative expense is $56,000 paid for with cash.

REQUIRED:

1. Prepare a production cost worksheet assuming weighted average for the Preparation Department. (Round unit costs to three decimal points for cost per Equivalent Unit, if necessary)
2. Prepare a production cost worksheet assuming FIFO for the Shipping Department. (Round unit costs to three decimal points for cost per Equivalent Unit, if necessary)
3. Prepare an Income Statement for World Class Steaks.
4. Journalize all entries.
5. An Executive Summary is required.