Coastal Brewers manufactures fruit infused beers for local as well as international consumption. The Beer is prepared through two processes. Process I involves Blending and Fermentation and Process 2 involves Canning and Labeling for market. The packing of finish product cost is minimal in relation to the other processes and is not treated as a separate process. All beer related direct materials are added at the beginning of process 1. The information presented below is for process 1. The organization uses the FIFO method for inventory valuation. Physical units (liters) Direct Materials Conversion Cost Work in process July 01. Degree of completion materials100%, conversion 50% 500,000 $100,000 $160,000 Started in July 4,500,000 Normal spoilage 3% of inputs Good units completed and transferred out in July ? Work in process July 31. Degree of completion, 100,% conversion 60% 400,000 Cost added during July $ 1,350,000 $ 1,820,000 All spoiled units are 40% complete as to conversion. 200,000 (liters) The spoiled units result from temperature fluctuations during the fermentation process. Required Prepare a process costing work sheet