g Corporation produces a single product that is manufactured in two departments bly and Finishing. Units of product are started in the Assembly Department and then t, where they are completed. Units are inspected for spoilage Finishing Department exactly halfway through the production process, after half of the direct Is and conversion costs have been added to the units. If spoilage is detected at this time, the transferred to the Finishing Departmen spoiled units are removed from production and scrapped. Good units are trans goods inventory, normal spoilage is charged to good units completed, and abnormal spoilage good units transferred to finished goods inventory during the month. ferred to finished charged as a period expense to the income statement. Normal spoilage is expected to be 10% of the he end o une, l 2,000 units were still in process in the Finishing Department, 40% complete as July, 25,000 units were transferred from the Assembly Department to the Finishing Department, and 28,500 were transferred from the to materials and 30% complete as to conversion costs. During Finishing Department to finished goods inventory. At the end of July, the Finishing Department still had 4,500 units in process, 60% complete as to materials, and 40% complete as to conversion costs. Cost data related to July operations for the Finishing Department is provided below. Manufacturing overhead is applied to production in the Finishing Department at the rate of 120% of direct labor cost. 2 ARMSTRONG CORPORATION COST DATA FOR FINISHING DEPARTMENT FOR MONTH OF JULY Beginning Inventory: Costs From Preceding Department Direct Materials Direct Labor 65,000 12,000 30,000 Current Period Costs: Costs From Preceding Department Direct Materials Direct Labor 76,200 80,400 227,000