Krug Corp. makes tables. Inspection/rejection of tables occur at the 80% point of manufacturing. The company uses FIFO costing. Normal spoilage is considered to be 5% of finished goods. The following information is available:

Physical Units Materials Conversion

Work-in-process inventory beginning 1,200 $1,000 $800

Started 10,000 12,000 32,000

Finished 9,500

Work-in-process inventory end 1,000

Degree of completion

Beginning inventory : 80% materials, 60% conversion

Ending inventory: 40% materials, 70% conversion

Required: Prepare a cost of production report.