Problem 3: Process Costing Three types of inputs to a continuous production process . Direct Materials (DM1) added at the beginning of the production process . Direct Materials (DM2) added when units are 50% complete Conversion Costs, added steadily throughout the process Beginning WIP Inventory 4,000 units: 55% completed for conversion $200,000: $80,000 in DM1, $80,000 in DM2, $40,000 in conversion . costs Activity During the Period Started 14,000 units Completed 14,000 good units Units in ending inventory are 60% complete Costs During the Period DM1 $96,040 DM2 $252,000 Conv. $66688 Total 1,014,900 Normal spoilage is 10% of good units. In addition, 100 units were abnormally spoiled in an incident with a new employee. All spoilage is detected at 45% complete Required: A. Compute EWIP, Abnormal Spoilage, and COGM assuming FIFO and put your final answer here. Round any decimals to 2 decimal places. COGM/Finished Goods Abnormal Spoilage EWIP B. Explain to your client what Process Costing is