The Rally Company operates under a process cost system and uses the weighted average method. All direct materials are added at the beginning of production in the department, and conversion costs are incurred evenly throughout production. Inspection occurs when production is 100% completed.

Following are data for July. All unfinished work at the end of July is 25% completed. The beginning inventory is 80% completed.

Beginning inventories
Direct materials	$4,000
Conversion costs	3,200
Costs added during current period
Direct materials	$36,000
Conversion costs	32,000
Physical units
Units in beginning inventory	2,000
Units started this month	18,000
Total units completed and transferred out	14,800
Normal spoilage	1,000
Abnormal spoilage	1,000

Required:

Production reports and management report of about 100 words