The BC Pen Company uses a process cost system to make high-end pens. Materials are added at the beginning of the process and conversion costs are uniformly incurred. At the beginning of March, the work-in-process is 40 percent complete and at the end of the month it is 60 percent complete. Spoilage is detected at the end of the process. Other data for the month include:
Beginning work-in-process inventory 4,800 units
Units started 60,000 units
Units placed in finished goods 36,000 units
Ending work-in-process inventory 3,600 units
Normal spoilage % on all units finished 20 percent
Conversion costs $120,600
Cost of direct materials $120,000
Beginning work-in-process costs: $36,288
Materials $12,000
Conversion $12,096
Required Prepare a production cost worksheet assuming that spoilage is recognized, and the FIFO method is used. Round conversion costs to three decimals. You will have a small rounding error when you assign costs.