Reference no: EM132694986

In its Department R, Recyclers. |nc.. processes donated scrap cloth into towels for sale in local thrift shops. It sells the products at cost. The direct materials costs are zero. but the operation requires the use of direct labor and overhead. The company uses a process costing system and tracks the processing volume and costs incurred in each period. At the start of the current period, 400 towels were in process and were 60 percent complete. The costs incurred were $638. During the month, costs of $13,300 were incurred. 3,800 towels were started, and 200 towels were still in process at the end of the month. At the end of the month. the towels were 20 percent complete.

Required:

Problem a. Prepare a production cost report; the company uses weighted-average process costing.

Problem b. Show the ?ow of costs through T-accounts