In its Department R, Recyclers, Inc., processes donated scrap cloth into towels for sale in local thrift shops. It sells the products at cost. The direct materials costs are zero, but the operation requires the use of direct labor and overhead. The company uses a process costing system and tracks the processing volume and costs incurred in each period. At the start of the current period, 450 towels were in process and were 60 percent complete. The costs incurred were $663.

During the month, costs of $15,600 were incurred, 3,900 towels were started, and 225 towels were still in process at the end of the month. At the end of the month, the towels were 20 percent complete.

Required:

a. Prepare a production cost report; the company uses weighted-average process costing.

b. Show the flow of costs through T-accounts. Assume that current period conversion costs are credited to various payables.

Physical Units Total Costs Conversion Costs Flow of Production Units Units to be accounted for: Beginning WIP inventory Units started this period Total units to be accounted for Units accounted for: Units completed and transferred out: Units in ending WIP inventory Total units accounted for 450 3,900 4,350 45 225 225 Costs to be accounted for: Costs in beginning WIP inventory Current period costs Total costs to be accounted for Cost per equivalent unit: Conversion costs Costs accounted for: Costs assigned to units transferred out: Conversion costs Costs assigned to ending WIP inventory: Conversion costs Total costs accounted for $ 0.00 $ 0.00 Work in Process Various Payables Beginning inventory Beg.bal. This period's costs: End.bal. Ending inventory Finished Goods Inventory Beg.bal. End.bal