(40 Points)

Epsilon Co. manufactures a product that is processed through two departments. The following information was obtained for the first department in January:

All direct materials are added at the beginning of the process, while conversion costs are added evenly throughout the process.

Inspection takes place when the units are 40% complete. Normal spoilage is 2% of good units passing inspection in the period. All spoiled units are discarded.

Beginning work-in-process (WIP) consisted of 100,000 units, 45% complete with respect to conversion costs.

Costs in beginning inventory included direct materials of $122,750 and conversion costs of $200,920.

There were 247,500 units started during the month, and costs added to production during the month totaled $303,800 for direct materials and $497,200 in conversion costs.

A total of 250,000 units were transferred to the second department, and 93,900 units remained in ending WIP, 20% complete.

Required:

Prepare a process costing production cost report assuming a FIFO approach. Be sure to indicate the cost of good units transferred out, the cost of abnormal spoilage, and the value of ending inventory.

Repeat part (a) but assuming a Weighted Average approach.