Intel Textiles Company makes silk banners and uses the weighted-average method of process costing. Direct materials are added at the beginning of the process, and conversion costs are added evenly during the process. Spoilage is detected upon inspection at the completion of the process. Spoiled units are disposed of at zero net disposal value.

Determine the equivalent units of work done in July, and calculate the cost of units completed and transferred out (including normal spoilage), the cost of abnormal spoilage, and the cost of units in ending inventory.

Direct Conversion Materials $195,000 Costs $8,000 Physical Units (Banners) Work in process, (July 1)a 1,300 Started in July 2017 ? Good units completed and transferred out in July 37,500 Normal spoilage 20,500 Abnormal spoilage 9,000 Work in process, July 316 16,000 Total costs added during July 2017 aDegree of completion: direct materials 100%; conversion costs, 50% Degree of completion: direct materials, 100%; conversion costs 50% $220,000 $28,000