XYZ is a manufacturer of furniture. It operates a weighted-average costing system and has two departments, cutting and assembly. The cutting department manufactures the furniture components and transfers them to the assembly department.

In the assembly department, conversion costs are incurred evenly during the process, and direct materials are added when the assembly process is 80% completed.

Spoiled units are detected when the conversion process is 70% completed. On average, XYZ expects spoiled units to be 5% of the good units that survived the inspection in the assembly department.

The spoiled units are sold to a local shop for $8 per unit. The proceeds from the sale of spoiled units are credited to the cost of completed goods. In the month of January, 100 units were spoiled and sold to the local shop.

Other data for the month of January,2021 are provided below:

ASSEMBLY DEPARTMENT DATA FOR THE MONTH OF JANUARY, 2021
WIP, beginning inventory (85% completed)							400 Units
Started in January(Transferred-in)							1,700 Units
WIP, ending inventory (90% completed)							200 Units
WIP, beginning inventory costs
Transferred-in							$5,500
Direct Materials							$2,800
Conversion costs							$7,160
Costs incurred in January
Transferred-in							$32,300
Direct materials							$11,200
Conversion costs							$17,440

Required:

1.For the month of January 2021, prepare the assembly department production report that includes a reconciliation of the physical units, and determines the cost of goods completed, the cost of ending work-in-process, and the loss from abnormal spoilage. Provide all necessary schedules to support your computations. (27 marks)

2. Prepare the journal entry to record the accounting of the assembly department production costs for the month of January 2021 (3 marks)