Question 1 (21 marks) The Coach Factory produces expensive bags in two departments, Sewing and Finishing Conversion costs are added evenly throughout both of the production processes. Direct materials are added at the beginning of the Sewing process During January, the beginning work in process in the Sewing department was 40% complete for conversion costs. Materials are added at the beginning of the process. The costs in opening WIP - Sewing included $6,000 for materials and $18,000 for conversion costs. Ending work-in-process inventory in the Sewing department was 40% complete for conversion costs Opening work in process for January in the Finishing department was 60% complete as to conversion. Costs in opening WIP included $7,000 for transfers from the Sewing Department and $10,000 for conversion costs. No direct materials are added in the Finishing department. Ending inventory was 30% complete Additional information about the two departments follows win Finishin inning work-in-process units Units started this Units transferred out this period 14,000 16,000 18,000 nding work-in-process units 18,000 $32,000 50,000 aterial costs added nversion costs added ransferred-out cost $19,000 Required (a) Prepare a Cost of Production Report using weighted-average costing for the Finishing Department to calculate the cost of units transferred out of the Finishing Department at the end of the period and the balance remaining in WIP Finishing (10 marks) (b) Prepare the journal entries to record (i) the costs incurred by the Finishing Department, and (i) the transfer of finished boots from the Finishing Department. (3 marks) (c)If Coach has an inspection point at the end of the Finishing Process to ensure no customer received a poor quality bag, and 400 units were found to be spoiled in January, how would this affect the Cost of Production Report and the assignment of costs in requirement (a) above? Coach expects normal spoilage to be 2% of good units completed (6 marks) (d)Using the information from requirement (c) above, prepare the journal to transfer the costs out of the WIP- Finishing Account. (2 marks) Page 2 of7