Carson Paint Company, which manufactures quality paint to sell at premium prices, uses a single production department. Production begins by blending the various chemicals that are added at the beginning of the process and ends by filling the paint cans. The gallon cans are then transferred to the shipping department for crating and shipment. Direct labor and overhead are added continuously throughout the process. Factory overhead is applied at the rate of $3 per direct labor dollar. The company combines direct labor and overhead in computing product cost.

Prior to May, when a change in the manufacturing process was implemented, Work-in-Process Inventories were insignificant. The changed manufacturing process, which has resulted in increased equipment capacity, allows increased production but also results in considerable amounts of Work-in-Process Inventory. Also, the company had 1,000 spoiled gallons in Mayone-half of which was normal spoilage and the rest abnormal spoilage. The product is inspected at the end of the production process.

These data relate to actual production during the month of May:

	Costs
Work-in-Process Inventory, May 1
Direct materials	$ 87,025
Direct labor	11,562
May costs added:
Direct materials	343,075
Direct labor	46,248

	Units
Work-in-Process Inventory, May 1
30% complete as to conversion activity	2,000
100% complete as to direct materials
Sent to shipping department	26,500
Started in May	32,000
Work-in-Process Inventory, May 31
80% complete as to conversion activity	6,500
100% complete as to direct materials
Total spoilage (units), in May	?question mark
% Spoilage considered normal	50%
Stage of processing when spoilage is detected	100%