Millennium 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.

Enter the physical units in first, then calculate the equivalent units.

Flow of Production	Physical Units
Work in process beginning
Started during current period
To account for
Completed and transferred out during current period
Normal spoilage
Abnormal spoilage
Work in process, ending
Accounted for
Equivalent units of work done to date

Direct Materials $110,000 Conversion Costs $2,000 Physical Units (Banners) Work in process, (July 1) 1,000 Started in July 2017 ? Good units completed and transferred out in July 50,000 Normal spoilage 4,000 Abnormal spoilage 3,500 Work in process, July 310 5,000 Total costs added during July 2017 a Degree of completion direct materials 100%; conversion costs, 50% Degree of completion: direct materials, 100%; conversion costs 50% $340,000 $28,000