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A manufacturer uses process costing. It has one direct material cost pool and one conversion cost pool. Information for the month is as follows:

Beginn3ng of Month End of Month

Work in process: 4,000 units 3,500 units

Conversion (% of completion in WIP): 60% 40%

Costs of Materials in WIP: $ 90,000 ?

Costs of Conversion in WIP: $ 80,000 ?

During the month:

Units started during the month: 32,000 units

Costs incurred for Materials: $410,000

Costs incurred for Conversion: $300,000

Total Spoiled Units detected: 1,150 units

Other Income Statement Information:

Sales: $900,000

Admin expenses $100,000

Inspection occurs when units are 80% converted, and inspection determines if the units are "acceptable" or "spoiled". Normal Spoilage is based on 3% of units started.

90% of direct materials is added at the beginning of the process, 7% of direct materials (for packaging) are added immediately after inspection, and the remaining 3% are added at the end of the process.

There were no finished goods or raw material inventories at any point of the process.

Required:

Part A: Calculate the value of ending WIP, and prepare an Income Statement for the month assuming that process costing is based on modified FIFO,

Part B: Calculate the value of ending WIP, and prepare an Income Statement for the month assuming that process costing is based on Weighted Average.

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