MedTech, Inc. manufactures surgical instruments. Direct Materials (DM) are added at the beginning of the production process. Conversion Costs (CC) are added evenly during the production process. Spoilage is found at the inspection point and inspection occurs at the stage of completion. Normal spoilage is 10% of good units completed. Summary data for the Forming Department for July 2019 are as follows:

Work-in-process, July 1 1,500 units

100% completed for DM; 60% completed for CC.

Costs of DM, $12,000;

CC, $9,000.

Units started during July, 8,500 units Good units completed during July, 7,000 units Work-in-process, July 31 2,000 units 100% complete for DM; 50% completed for CC. DM added during July $76,500; CC added during July $89,100 Process-Costing with Spoilage An Example