P5.38 Process costing with spoilage; journal entries: manufacturer LO 5.4 Steelworx Ltd accumulates costs for its single product using weighted average process costing. Direct material is added at the beginning of the production process, and conversion occurs uniformly throughout the process. All spoilage is detected at the quality inspection point, which occurs after production is 25 per cent complete. A partially completed production report for April follows: Production report, April Equivalent units Percentage of completion Direct with Physical respect to mater Conver units conversion ial sion Work in process, 1 April 100 000 60% Units started during April 200 000 Total units to account for 300 000 Units completed and transferred out during April 220 000 Units spoiled during production 60 000 Work it process 30 April 20 000 80%