You have just been hired as the cost accountant for Digitech Corporation. This position has been vacant for one month. Fred Sotheby, manager of Digitech's tax department, has performed some computations for last month's information. However, he confesses that he doesn't remember a great deal about cost accounting. Fred took the following costs and units for last month (July 1994) from the financial statements: Work-in-process (50% complete as to labor and overhead) Finished goods COSTS UNITS 300,000 200,000 $ 660,960 $1,009,800 Materials are added at the beginning of production, and overhead is applied to each product at the rate of 60% of direct labor costs. Labor and overhead are incurred uniformly throughout the process. There was no finished goods inventory at the beginning of last month. A review of Digitech's inventory cost records provides you with the following information: work-in-process, 07/01/94 (80% complete as to labor and overhead) Units started in production Units completed in July Costs for July UNITS DIRECT DIRECT MATERIALS LABOR COSTS COSTS 200,000 $200,000 $315,000 1,000,000 900,000 $1,300,000 $1,995,000 Required: a. Prepare a production cost report for July. b. Prepare the journal entry to correct the recorded amounts for finished goods and work-in- process inventory.